MARCHASIA BUSINESS OUTLOOK9Japan has announced plans to adjust its military equipment transfer regulations to permit the export of the jet fighter it is co-developing with Britain and Italy. This decision, disclosed by Japan's Prime Minister Fumio Kishida, addresses a potential hurdle that could have impeded the project's progress.The collaborative effort, known as the Global Combat Air Programme (GCAP), involves key players such as Britain's BAE Systems PLC, Japan's Mitsubishi Heavy Industries, and Italy's Leonardo. The program aims to introduce an advanced fighter aircraft by the mid-2020s.Under Japan's strict military export rules, overseas sales of lethal equipment are prohibited. However, loosening these regulations will enable Tokyo's partners to market the aircraft internationally, which would help distribute development costs across a larger number of units and potentially reduce unit costs.The adjustment in export rules will allow sales to countries with defense equipment transfer agreements with Japan and that are not engaged in conflicts. Each export will require Cabinet approval, and the rule change will specifically apply to the GCAP fighter.Partnerships with additional countries, such as Saudi Arabia, are being considered to participate in GCAP as junior partners. Saudi Arabia's involvement could bring financial contributions and expand the market for the project, which is anticipated to involve significant expenditures.Various companies, including European missile maker MBDA, Japanese avionics manufacturer Mitsubishi Electric Corp, and engine makers Rolls-Royce PLC, IHI Corp, and Avio Aero, are also contributing to the GCAP initiative. Samsung Electronics is planning to adopt a chip making technology promoted by its rival SK Hynix in a bid to catch up in the competition to produce high-end chips essential for powering artificial intelligence, according to five sources familiar with the matter.The demand for high bandwidth memory (HBM) chips has surged alongside the increasing popularity of generative AI. However, Samsung, unlike competitors SK Hynix and Micron Technology, has not engaged in any deals with AI chip leader Nvidia to supply the latest HBM chips.One of the factors contributing to Samsung's lag behind its rivals is its adherence to chip making technology known as non-conductive film (NCF), which has encountered production challenges. In contrast, Hynix has transitioned to the mass reflow molded underfill (MR-MUF) method to address the weaknesses of NCF, as noted by analysts and industry observers.Recently, Samsung has placed orders for chipmaking equipment capable of handling the MUF technique, according to three sources directly involved."Samsung needed to improve its HBM production yields... adopting the MUF technique represents a concession for Samsung, as it follows the approach initially adopted by SK Hynix," one source commented. While Samsung's HBM3 chip production yields currently range from 10-20 percentage, SK Hynix has achieved yield rates of approximately 60-70 percentage for its HBM3 production, as stated by several analysts.The latest versions of HBM chips, HBM3 and HBM3E, are in high demand, particularly for their integration with core microprocessor chips to handle large volumes of data in generative AI applications. Samsung is also in discussions with material manufacturers, including Japan's Nagase, to procure MUF materials. However, mass production of high-end chips using MUF is unlikely to commence until next year at the earliest, as Samsung needs to conduct further testing. JAPAN TO MODIFY TRANSFER REGULATIONS TO PERMIT EXPORTS OF MILITARY JETSSAMSUNG TO ADOPT CHIP MAKING TECHNOLOGY UTILIZED BY COMPETITORSNEWSROOM
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