Following Stage 1 of the reorganisation and consolidation of Japanese semiconductor and LCD producers from the end of the 1990’s to 2001, it’s reported that Stage 2 is fast being approached as well as something of a rethink where this market is concerned.

The changing landscape in this area is expected to have a ‘very great’ effect on the country’s industrial gas market.

As an example of some of the developments, the purchasing system of one of the producers has been unified as a result of the reorganisation and consolidation of the producers. In terms of gas pricing, the scale of the plant and practices have been key factors for price negotiations until now, but are increasingly being disregarded and the lowest prices possible implemented.

A number of consolidation and restructuring developments are taking place across the companies involved in Japan’s semiconductor and LCD market, with such actions directly affecting the way in which gas supply deals are both negotiated and delivered upon.

For example, Hitachi displays had owned 50% of the shares in LCD panel producer IPS Alpha Technology but as a result of a number of business changes, Matsushita Electric Industrial adopted a 45% holding and planned to acquire the stock held by Hitachi Displays. Hitachi will keep a stock holding of up to 10%.

The business transactions led to a change in gas supply practice, however. IPS Alpha Technology became virtually an affiliate company of Matsushita and the gas supply to the company’s new plant in Himeji was affected. The supply of nitrogen from onsite facilities to Hitachi had traditionally been handled by gas centres established as a joint venture by Showa Denko and Taiyo Nippon Sanso.

In the case of the Himeji plant though, Matsushita directly negotiated with gas producers, a number of companies entered the bid, and Air Water eventually gained the order for supply of bulk gases such as nitrogen. Just one of the ways in which the trends for gas supply in the electronics industry are changing.

Whether the overall situation continues in Japan and the reorganisation concerns accelerate in both Japan and globally, the Gas Review notes that such a trend should be viewed with a careful eye from the viewpoint of the industrial gas market.