Kokusai Electric is one of the largest semiconductor companies in the world, with a strong presence in the Japanese market. The company has been at the forefront of innovation and technology, and is now an essential part of the semiconductor industry.
This exclusive article will provide an overview of Kokusai Electric’s place in the semiconductor market. First, look at the recent news of Applied Materials’ agreement to purchase the company for $2.2 billion.
Overview of Kokusai Electric
Kokusai Electric Corporation (Kokusai), formerly Matsushita Electric Industrial Co., Ltd. is a Japanese-based electronics and semiconductor manufacturing company, headquartered in Tokyo. With nearly 25 years of experience in the semiconductor industry, Kokusai’s expertise lies in developing specialized components for all modern applications. The company manufactures components such as memory chips, driver ICs and special-purpose logic IC’s going beyond the conventional products being manufactured by other large manufacturers. A leader in its field, Kokusai holds a broad portfolio of patents and licenses which it uses to remain competitive and retain its exclusive market position in the global Semiconductor market space.
The company has factories spread across multiple locations including China, Japan, Thailand and Singapore and serves over 300 customers primarily located in Asia and Europe. In Oct 2020, Applied Materials announced it’s intent to acquire Kokusai Electric Corp for $2.8 billion as part of its efforts to extend its capabilities into new markets while strengthening its presence across Tokyo Growth Corridor (TGC) region which boasts of a strong concentration of customers within the IoT/electronics space including automotive, industrial automation and energy solutions. The acquisition marks one of the biggest deals within the Semiconductor industry space thus far cementingkokusai’s mark on a much larger scale than before under their expansion plans with Applied Materials.
Overview of the semiconductor market
Kokusai Electric Corporation (Kkokt) is a leading global semiconductor equipment supplier headquartered in Tokyo, Japan. The company was founded in 1954 and has since developed a broad range of products required to manufacture complex semiconductor devices for the Information & Communications Technology (ICT) market.
The semiconductor industry consists of device manufacturers who design, develop and manufacture integrated circuits (ICs) and companies like Kkokt who supply equipment used in the manufacturing process. The IC market is driven by the relentless demand for more powerful and efficient CPUs, GPUs, system-on-chip devices and other components used in computing, software applications, automotive control systems and other electronic products.
With its strong presence in Japan and the U.S., Kokusai Electric offers state-of-the-art technology including advanced laser interferometer glass cutting systems, lithography systems, wet etchers and backside cleaning systems. This allows them to provide high quality products with quick turnaround times to their customers worldwide. Furthermore, they have been particularly successful in capturing a large portion of the growing Chinese market which has seen substantial growth over past decades due to its proximity with Japan. Lastly, through strategic collaborations with key players in the industry such as Applied Materials Incorporated and Samsung Electronics Co., Ltd., Kokusai Electric has become one of the leading players in this segment of the semiconductor industry.
Analysis of Kokusai Electric
Kokusai Electric Corporation is a leading semiconductor company known for its leading process technology in the semiconductor industry. Over the years, Kokusai Electric has developed a strong portfolio of products in wafer fabrication tools, services, and solutions.
With the Exclusive: Applied Materials to buy KKR’s Kokusai Electric for $2.2bn announcement, it is clear that Kokusai Electric has an interesting place in the semiconductor market and the industry. In this article, we’ll look at the role of Kokusai Electric in the semiconductor industry and analyze the potential impact of the acquisition.
Market position of Kokusai Electric
Kokusai Electric Corp., founded in 1954, is a leading global supplier of semiconductor manufacturing equipment. Based in Osaka, Japan, Kokusai designs and manufactures thin-film deposition tools for the most advanced chip technologies manufacturers worldwide require. This includes advanced lithography systems, etch process tools and metrology/inspection systems.
Kokusai Electric (formerly named FUJI KOKUSAI ELECTRIC) has been building upon its core strengths over more than half a century of semiconductor manufacturing excellence. The company is committed to technology innovation, providing customers with products that continue to advance the quality and performance standards for advanced chip sets and devices. Kokusai is ISO9001 certified, offering high-quality products delivered in an efficient assembly line system of exceptional speed and cost efficiency.
This year alone Kokusai Electric has participated in numerous projects such as the Kyoto University Research Center’s “Substitutable Electronics System Experiment” project to develop new technologies for flexible electronic systems that can adapt to various applications fluently across different platform environments from consumer devices to industrial robots without replacing components; Fuji Yagi Electronics’ next-generation design suite—the DSDZ400—which creates dedicated tools such as software libraries for acquiring multi-domain information such as device behavior data; and Hypas Co.’s programmable logic IC development tool partnership which utilizes field programmable gate array (FPGA) to quickly design and verify a sophisticated application-specific integrated circuit (ASIC).
Kokusai has recently gained attention following news of an $2.2bn acquisition by Applied Materials Inc., a leader in equipment manufacturing technology with an extensive global footprint. With its stronghold on quality equipment supported by timely customer service, both companies are expected to benefit greatly from this landmark agreement as they combine their resources and move towards further success within the semiconductor market today.
Financial performance of Kokusai Electric
Kokusai Electric Corp., owned by private equity firm KKR & Co. Inc., has consistently maintained robust financial performance. Revenue for the fiscal year ended March 31, 2019 reached 248 billion Yen (2.23 billion US$). This represented an 8.4% increase from the previous year, on the back of strong demand for products such as surface-mount components in industrial automation and construction of infrastructure for smart cities.
Operating profit increased by 240 million Yen (2.13 million US$) to 11.3 billion Yen (100 million US$). The company’s gross margin stood at 36%, while its operating margin was at 5%.
Its net debt also saw a slight decrease, despite investing heavily in research and development in 2020, with this amount falling to 18 billion Yen (158 million US$) compared to 21 billion yen in 2018. This enabled the company to remain profitable despite slowing economic conditions in Japan and increased competition due to several new entrants into the semiconductor market over recent years.
Exclusive: Applied Materials to buy KKR’s Kokusai Electric for $2.2bn
Applied Materials recently acquired Kokusai Electric for $2.2 billion in a major move. This deal will give Applied Materials a stronger foothold in the semiconductor market, as Kokusai Electric is one of the leading suppliers of coating, etch, and deposition products. In addition, it services the wafer-level packaging, memory, and advanced processes semiconductor markets.
Let’s look at this acquisition and what it means for the industry.
Reasons for acquisition
On August 1st, 2019, Applied Materials, Inc announced its plan to acquire Kokusai Electric Corporation from KKR for $2.2 billion. The acquisition marks the company’s entry into the semiconductor manufacturing equipment sector and positions them with a prominent position in both markets.
There are several key factors which make this acquisition beneficial for both Applied Materials and Kokusai Electric:
1. Increasing Opportunities: By acquiring Kokusai Electric, Applied Materials will gain access to a global customer base with competitive offerings across multiple generations of advanced semiconductor device manufacturing processes. Kokusai Electric’s well-established customer relationships allow Applied Materials to expand their addressable market in the semiconductor industry as they can extend their offering to new customers and fields within the electronics manufacturing industry.
2. Lowering Cost Structure: With a well-established network of global service and sales offices, owning Kokusai can help lower cost structure by ensuring best pricing on components used in the development of manufacturing equipment, while also gaining access to experienced staff in Japan who understand national market conditions better than foreign investigators or overseas personnel working abroad with limited local knowledge.
3. Market Expansion: Acquiring Kokusai Electric provides an effective way for Applied Materials to expand their presence further beyond its current capabilities into large new markets such as China, Singapore, South Korea and other countries where there is great potential in integrated device manufacturing using next-generation process technology as there is increased demand for products requiring more advanced product requirements including higher performance, lower capacitor sizes and reduced power consumption from clients using multiple systems simultaneously across diverse industrial applications. This will help significantly expand opportunities for growth within these regions and address some major challenges faced by current business operations concerning cost effectiveness, technological advancements, operational efficiency etc., thereby creating greater value for end users.
Impact of acquisition on the semiconductor market
The announcement of Applied Materials’ acquisition of Kokusai Electric from KKR has generated considerable speculation in the semiconductor industry, particularly regarding the potential impact on the market. The $2.2 billion deal, which is expected to be finalized by April 2021, could shape the future of the semiconductor sector in several ways.
Kokusai Electric’s experience and expertise in semiconductor fabrication equipment have helped it gain a global market share of more than 12%. With this substantial presence in the industry, Applied Materials’ takeover is likely to generate increased competition within the market and lead to greater investment in research and development. This could ultimately benefit consumers by reducing manufacturing costs and expanding product offerings.
Furthermore, Kokusai Electric’s entrance into develop novel technologies allows Applied Materials to strengthen its position as a global leader in chip-making solutions by expanding its portfolio of advanced products while better positioning itself as a comprehensive partner for clients that span multiple stages of device fabrication services.
Ultimately, with Applied Materials’ acquisition of Kokusai Electric, their enhanced presence in both established and growing markets will position them at an advantage over competitors by creating a stronger global mesh that can cope with unpredictable demand shifts and advance faster than those without such resources providing greater value for their customers across the industry ecosystem.
The semiconductor market has seen a significant power shift with Applied Materials’ purchase of Kokusai Electric. The deal is a major milestone and signals a shift in consolidation trend in the industry.
This article will conclude with a summary of the implications of the acquisition on the semiconductor market.
Summary of findings
This case study examined the acquisition of Kokusai Electric Corp. by Applied Materials, Inc., worth $2.2 billion. Kokusai Electric is a global supplier of chip-making equipment and services to the semiconductor industry. Applied Materials, Inc. expects this acquisition to enable them to provide comprehensive solutions for their customers’ chip manufacturing needs. In addition, by obtaining Kokusai Electric’s technology and offerings, Applied Materials can extend their market in JP Morgan Chase & Co.’s fast-growing semiconductor equipment secore and achieve higher margin growth potential.
Overall, this acquisition strengthens both companies’ competitive positions in the rapidly changing semiconductor market and should benefit both financially in the long run. In addition, this transaction highlights that Applied Materials has now established itself as one of the industry leaders in sustainability commitments—a role it will continue to play in driving sustainable progress within this sector.
Implications for the semiconductor market
The pending acquisition of Kokusai Electric by Applied Materials has major implications for the global semiconductor market. With the purchase, Applied Materials stands poised to become one of the world’s largest providers of capital equipment solutions, significantly increasing its presence in many key markets.
The acquisition will help strengthen Applied Materials’ position as a leader in metrology and inspection solutions, while at the same time bringing its expertise and offerings in equipment, services and software to Kokusai Electric’s portfolio.
The acquisition may also lead to further consolidation within the semiconductor market as companies look to capitalize on opportunities created by Applied Materials’ expanded product portfolio. Moreover, it creates an opportunity for other manufacturers and suppliers in related sectors such as advanced materials and components to benefit from increased demand for their services. Additionally, by extending its reach into Japan and other Asian markets, Applied Materials will likely drive greater competition among existing players looking to remain viable long-term.
Ultimately, Kokusai Electric’s acquisition by Applied Materials promises improved competitiveness in the global semiconductor market, which is expected to continue growing substantially over the coming years. By combining forces with a major player like Applied Materials and taking advantage of their advanced technology and capabilities, Kokusai Electric stands poised to become a frontrunner in this dynamic space – one that shapes technological advancements around the globe each year.