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Japan’s Daifuku responsible for moving chips globally counts on data boom

For close to four decades, one Japanese company has been trusted to move silicon wafers around inside the factories of the world’s biggest chipmakers. Now it’s going back to the drawing board and redesigning its ubiquitous overhead conveyors to handle an “exponential” surge in data usage and global chip demand.

Daifuku Co. has over its 85 years in business gone from ferrying documents between offices and hospital wards to handling the world’s most delicate microelectronics, making the conveyor belts and boxes that zip across the ceilings of modern semiconductor plants. Those containers and rails, which shuttle chips to different parts of the fabrication process at speeds surpassing 5 meters per second, will need to bear 100kg (220 pounds) or five times their current load within years, Chief Executive Officer Hiroshi Geshiro said.

“Many in the industry are optimistic that growth is here to stay, as the amount of data that society must deal with has increased exponentially,” he told Bloomberg News in an interview. “Our system is like blood vessels connecting all the important organs” and will need to handle that explosion in demand. The company stockpiled materials at the start of the pandemic, but may face challenges if global supply shortages intensify or prolong, he added.

The 63-year-old’s remarks underscore the bullishness of global chipmaking leaders such as Intel Corp. and Taiwan Semiconductor Manufacturing Co., which have been spending unprecedented sums of money to capture a wave of new demand from industries such as electric vehicles, connected home devices and internet servers. Between them, the two companies have committed to spending roughly $70 billion on new manufacturing equipment and facilities this year. Intel announced two giant new chipmaking campuses — one in Ohio and another in Germany — in recent months, as it joins rivals in preparing for a doubling of the $550 billion industry over the next decade.

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At the heart of that impending explosion will be Osaka-based Daifuku, founded in 1937 as a maker of forging machines before scoring its first big break 20 years later when Toyota Motor Corp. came calling. Today, analysts say its systems power everything from Inc.’s giant fulfillment centers to the plants of Intel and TSMC.

Its factory conveyance systems are among the world’s most sophisticated. Its overhead vehicles are powered wirelessly and can cover 320 meters (350 yards) in a minute without shaking or disturbing their contents. A routing system aided by artificial intelligence helps plot paths for hundreds of containers across a complex intertwined network without creating a jam.

Daifuku’s closest rival is Muratec Automation Co., and together they’ve become critical in the manufacturing of most chips from basic microcontroller units to the most advanced semiconductors in servers, laptops and game consoles, said Tokyo-based Bain & Co. partner Jean-Philippe Biragnet. Their systems and other highly automated processes mean “human hands never touch the product and humans are really only there to maintain the tools.”

“There are no competitors that can match Daifuku when it comes to speed in meeting customer requests for production lines,” said Omdia analyst Akira Minamikawa. The company’s long track record has “built a high level of trust and confidence among semiconductor makers. In chipmaking, minimizing travel time between processes is key to maximizing output.”

While Geshiro declined to disclose the names of his customers, SMBC Nikko Securities analyst Satoshi Taninaka wrote in a report this month that Daifuku’s transport system is used in almost every factory making chips with the most advanced fabrication processes of 7nm and smaller. Bloomberg

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