Sumitomo Electric to Make GaAs Substrate in China

Sumitomo Electric Industries announced on Friday the firm established composite semiconductor material manufacturing subsidiary in Changzhou of Jiangsu, China. The wholly owned subsidiary with a capital of US$ 94 million starts producing gallium arsenide substrate in October to supply for light-emitting diode and devices of mobile phone.

Sumitomo Electric Industries decided to establish the Chinese subsidiary for production cost reduction and for stable supply with multiple manufacturing sites. The subsidiary is first Japanese composite semiconductor material plant in China.

The Chinese subsidiary mainly exports gallium arsenide substrate at first and expects to increase the supply to Chinese users when light-emitting diode industry is estimated to grow in Changzhou. Sumitomo Electric Industries eyes future upper stream operation to make gallium arsenide single crystal ingot in China.

Sumitomo Electric Industries produces composite semiconductor materials including gallium arsenide, indium phosphorus and gallium nitride at plant in Itami and Kobe in Hyogo, USA and Taiwan while the firm has the upper stream operation only in Japan. The sales of composite semiconductor material business were about 12.5 billion yen in fiscal 2009 ended March 2010 and 7.2 billion yen in first half of fiscal 2010.