HCM City, August 23, 2026 – The Europe Today: Japanese silicon manufacturer Tokuyama is establishing production facilities in Việt Nam and Malaysia for a key semiconductor material, in a move designed to reduce its dependence on concentrated manufacturing in Japan and limit the risk of supply disruptions.
The Vietnamese plant, inaugurated last week, will grind, clean and analyse polysilicon, an essential raw material for semiconductor wafers. Tokuyama is investing US$60 million in the facility, which is ultimately expected to reach an annual capacity of 4,000 tonnes. Commercial production is scheduled to begin in 2027 following a trial operation period.
Speaking at the inauguration ceremony in HCM City, Tokuyama Chairman Hiroshi Yokota said the facility marked a major step in supporting the company’s growth strategy. The plant is intended to provide a solid overseas base as Tokuyama restructures a polysilicon production network that has until now been concentrated at its Japanese site.
At the Vietnamese facility, workers will crush polysilicon rods into small pieces that can be fed easily into customers’ furnaces. The process relies on manual labour to minimise the risk of contamination by metal particles that machinery could generate, and to allow fine adjustments during processing. It therefore requires a skilled and reliable workforce.
Tokuyama is scheduled to complete a polysilicon synthesis and deposition plant in Malaysia next spring. That facility will be operated by a joint venture with OCI of the Republic of Korea, with total investment estimated at around $300 million.
Once both Southeast Asian plants are operational, the company’s total production capacity, including its Japanese plant, will rise 50 per cent to 12,500 tonnes a year.
Tokuyama, which can refine polysilicon to a purity level at which impurities are reduced to one part per billion, ranks third globally in semiconductor-grade polysilicon production with a market share of about 20 per cent. That concentration has also left its sole production site a potential vulnerability, as any shutdown could disrupt supplies across the industry.
Tokuyama President Tomohiro Inoue said customers have increasingly demanded diversified sources of supply since the COVID-19 pandemic.
The Japanese Government has provided the company with a subsidy of 4 billion JPY ($25.2 million) to support its entry into the Vietnamese market. Tokuyama has opted to distribute production across friendly Southeast Asian countries to secure stable supplies as chipmakers including Rapidus and TSMC establish manufacturing operations in Japan.
Silicon wafer shipments are expected to reach 15.5 billion square inches by 2028, up about 20 per cent from 2025, according to a report by the Semiconductor Industry Association (SEMI). Demand for ultra-high-purity polysilicon is rising as investment in artificial intelligence drives growth in components such as high-bandwidth memory.
Inoue said customer forecasts indicated demand would exceed the capacity of the Japanese plant around 2027. On current projections, the additional output from Việt Nam and Malaysia is expected to be fully absorbed within three to four years.
The Vietnamese plant has the potential to nearly double its capacity, and the company will consider expanding output at all three facilities, as the Japanese site is already approaching its production limit.
