Sumitomo Chemical has established a mass production system for 4-inch indium phosphide epitaxial wafers at its Ibaraki Works in Hitachi, aiming for sales of around 10 billion JPY from the lineup by the mid-2030s to support the surging power demands and data loads of generative AI infrastructure.
The race to scale next-generation digital infrastructure is hitting the manufacturing floor. As the widespread adoption of generative AI, along with the expansion of IoT and cloud services, and the enhancement of communication network infrastructure push conventional network architectures to their limits, supply chains are shifting to meet the bottleneck head-on. At the center of this transition sits a critical core material for optical communications: the indium phosphide epitaxial wafer.
Inside the Ibaraki Works Mass Production Line
Sumitomo Chemical has established a mass production system for 4-inch indium phosphide (InP) epitaxial wafers, a type of compound semiconductor, at its Ibaraki Works in Hitachi, Ibaraki Prefecture, and has begun selling these products. As one of the few epi houses in Japan capable of stably mass-producing InP epitaxial wafers, the Company will contribute to the societal implementation of photonic-electronic convergence technologies that support next-generation digital infrastructure. Manufacturing these components demands rigorous technological precision, requiring advanced technologies to precisely control material composition and surface conditions in the epitaxial growth process under high temperatures. Sophisticated process management is necessary throughout the entire manufacturing process, including the handling of raw material gases, in order to achieve both stable operations and quality assurance.
To overcome these manufacturing hurdles, the company brought together its proprietary composition control, thin-film stacking, and crystal growth process control technologies cultivated through its more than 25 years of mass-producing gallium arsenide (GaAs) epitaxial wafers and gallium nitride (GaN) epitaxial wafers. These technologies have enabled the Company to establish a mass production system for InP epitaxial wafers that combines high quality with high productivity, yielding high-quality InP epitaxial wafers that feature a uniform crystal structure, reproducibility in mass production, and uniform film thickness.
Power Challenges in AI Data Centers and the Photonic Shift
With the widespread adoption of generative AI, along with the expansion of IoT and cloud services, and the enhancement of communication network infrastructure, there is growing demand for data processing that is faster and capable of handling larger volumes of data across a wide range of fields. For AI data centers in particular, which handle enormous amounts of information, power consumption and information processing loads have become major global challenges. Photonic-electronic convergence technologies are attracting attention as a key solution to these problems. This is a next-generation semiconductor and data center technology that enables high-speed, large-capacity data processing and communications while reducing power consumption, achieved by using light instead of electricity, which was conventionally used for signal exchange through wiring inside semiconductor chips and data centers, and by integrating electrical and optical circuits.
Among these technologies, InP epitaxial wafers are seeing rapidly expanding use in next-generation data centers and high-speed network fields as a core material for enabling high-performance optical semiconductor devices that efficiently convert electrical signals to optical signals and vice versa. Demand for InP epitaxial wafers is expected to substantially grow in the future.
Business Projections and Expanding Compound Semiconductor Portfolios
As one of the few epi houses capable of stably mass-producing these wafers, Sumitomo Chemical positions the ICT & Mobility Solutions business as one of its growth drivers and is focusing on semiconductor-related businesses as a priority area. The Company also aims to achieve sales of around 10 billion JPY from its InP epitaxial wafer product lineup by the mid-2030s.
The launch of mass production and sales of high-quality InP epitaxial wafers will serve as an opportunity for the Company to build a material supply system that supports the spread of photonic-electronic convergence technologies, accelerating its business development in the ever-growing markets related to AI data centers and high-speed network fields. Going forward, the Company will add InP epitaxial wafers to its existing lineup of compound semiconductor materials, which includes GaN substrates, GaN epitaxial wafers, and GaAs epitaxial wafers, and further expand its business in growth markets, such as wireless communications, power semiconductors, and data centers. In this way, Sumitomo Chemical will contribute to developing next-generation digital infrastructure and achieving a smart society. Additionally, Sumitomo Chemical plans to begin mass production of a new electrolyte material for solid-state batteries that shows promise for electric vehicles as early as fiscal 2028, a move expected to lower costs without compromising on performance, with its new halide-based solid electrolyte said to match the performance of current mainstream materials.
