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(Bloomberg) -- The Japanese construction firm Kajima Corp. has ridden a boom in building semiconductor plants to a surge in its revenue and stock price. Now, the Tokyo company will have to navigate bitter conditions on the northern island of Hokkaido to keep up that success.
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Kajima helped Japan get off to a quick start in developing its chip industry after governments around the world recognized the need for reliable silicon supplies amid rising geopolitical tensions. The company led the speedy construction of a new fabrication facility for Taiwan Semiconductor Manufacturing Co. on the southern island of Kyushu, bringing the project to fruition before the US government could dole out its first subsidy check to TSMC and other chipmakers for American fabs.
That building blitz turbocharged Kajima’s growth, with its stock price surging 86% in the past year. Yet the company’s next project presents an enormous challenge: It’s responsible for erecting an even more advanced chip fab, for the government-backed Rapidus Corp., on terrain where snow, frozen ground and isolation from major population centers create significant complications. Koichi Takano, Kajima’s general manager for the project, vows to finish this chip fab on time too.
“Less experienced teams just simply can’t handle the job,” he said over Zoom from the construction site. “We, on the other hand, have seen, touched and made the latest generation of clean rooms for chip customers.”
This isn’t hyperbole. Kajima over the last decade has led development of at least 10 chip plants, where semiconductors are crafted in so-called clean rooms filtered of airborne impurities. The low-profile, 184-year-old company has quietly become Japan’s secret weapon for building its semiconductor industry.
Rapidus will present new difficulties, however. The government-backed chip startup aims to launch pilot lines next year ahead of the targeted mass production of 2-nanometer semiconductors in 2027. Kajima, which began working on the factory in September, must complete about half the facility by the end of this year so suppliers of chipmaking equipment like ASML Holding NV can begin installations from December.
At the same time, construction is growing more costly in Hokkaido. Competition for workers has intensified because of chronic labor shortages and rigid workplace regulations. Ski resorts on the island, including the famous Niseko, are attempting their own building surge. Prices for materials and heavy equipment have been inflated because of the weak yen and Russia’s war against Ukraine.