Why Is Kyocera Expanding Semiconductors Investments to $9.8 Billion?

Kyocera, a Japanese technology company, known for its ceramic components, has announced plans to increase its semiconductor investment significantly.

According to Kyocera President Hideo Tanimoto, the company will raise 1.3 trillion yen ($9.78 billion) over the next three fiscal years through March 2026. This investment pump roughly doubled the amount spent during the previous three years.

A Different Approach

To fund this expansion, Kyocera will fundraise by pledging its KDDI shares as collateral for the first time and borrowing up to 1 trillion yen. A report from Nikkei Asia tells us that this marks a departure from Kyocera's previous debt-free management policy, indicating the company's confidence in the growth potential of the semiconductor market.

As part of its expansion plans, Kyocera will also increase its capital expenditures by approximately 900 billion yen and its research and development expenditures by 400 billion yen, a 60% increase. These investments will focus on ceramic components and other areas as Kyocera looks to tap into the expected growth of the chip market in the medium term.

Market Developments

According to a new report, the global ceramic matrix composites market is predicted to rise significantly in the following years. The market is expected to be worth about $5,737.39 million in 2021, having increased at a compound annual growth rate of 5.48% from 2016.

From 2021 to 2026, the market is also predicted to increase by 10.66%, reaching a value of $9,519.75 million. The market is expected to grow at a CAGR of 11.87% from 2026 to 2031, reaching a value of $16,678.06 million.

Increasing demand for consumer electronics, robust economic growth in emerging markets, higher disposable income, and an increased need for air travel drove the historic expansion of the ceramic matrix composites industry. However, the COVID-19 pandemic and growing expenses hampered industry expansion.

In the future, the market will be driven by high demand for lightweight automobiles, a rising need for electric vehicles, and rising demand for portable electronic devices and medical equipment produced with ceramic matrix composites. However, rigorous government controls and trade prohibitions may stifle industry expansion.

AGC Ceramics Co., Ltd., Imerys, Carbo Ceramics, Inc., 3M, Corning, and Kyocera Corporation are some of the prominent competitors in the ceramics market.

What This Means for Kyocera

Overall, Kyocera's expansion into the semiconductor market is a significant move that could have substantial implications for the industry.

As one of the leading players in ceramic components, Kyocera's increased investment in semiconductors could lead to the development of new and innovative technologies that drive the industry forward. It will be interesting to see how Kyocera's expansion plays out and how it affects the competitive landscape in the semiconductor market.

More About Kyocera

Kyocera Corporation, headquartered in Kyoto, Japan, is a multinational ceramics and electronics manufacturer. Kazuo Inamori started Kyoto Ceramic Company, Limited in 1959 and renamed it in 1982. The company makes industrial ceramics, solar power generation systems, telecommunications equipment, and other technologies.

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