Resonac Bets on Chip Packaging

TYO:4004

Resonac is the new name for Showa Denko, a Japanese chemical group that has spent the past few years reshaping itself around semiconductor materials. By buying Hitachi Chemical in 2020, it became one of the world’s leading suppliers of materials for chip packaging, the “back-end” process that is growing in importance as AI chips stack and connect more silicon in a single package.

From Showa Denko to Resonac

Showa Denko was founded in 1939 and for decades was known for a broad mix of products, from aluminium and graphite electrodes to petrochemicals and industrial gases. In 2020 it acquired Hitachi Chemical from Hitachi in a deal worth close to ¥1 trillion, one of the largest acquisitions in Japan’s chemical industry. The two companies were fully integrated in January 2023 under the new name Resonac, listed on the Tokyo Stock Exchange.

The name combines “resonate” with the “C” of chemistry, and the company’s message is that it aims to be a “co-creative” partner to chipmakers rather than a general chemical supplier. Since the merger it has sold or separated several non-core businesses and has said it intends to separate its petrochemical operations, in order to focus capital on semiconductor and electronic materials.

What Resonac Supplies to the Chip Industry

Back-End: Packaging Materials

Most of Resonac’s strength in semiconductors comes from Hitachi Chemical’s former product lines. These are materials used after the chip is made, when it is mounted, protected and connected:

• Die bonding films — thin adhesive films that hold stacked memory chips together
• Epoxy moulding compounds — the resins that encapsulate and protect chips
• Copper-clad laminates and build-up films — materials for package substrates
• Photosensitive films — used to form fine circuit patterns on substrates

Resonac holds leading global shares in several of these products, which are critical for high-bandwidth memory (HBM) and other advanced packages used in AI accelerators.

Front-End: Gases and Slurries

From the Showa Denko side, Resonac also supplies high-purity specialty gases for etching and cleaning, and CMP slurries used to polish wafers flat. It is also active in silicon carbide (SiC) epitaxial wafers for power semiconductors used in electric vehicles and industrial equipment.

Leading a Packaging Consortium

Advanced packaging needs materials, equipment and design to work together. Resonac leads JOINT2, a consortium of Japanese material and equipment companies that develops and tests packaging technologies together. In 2024 it announced US-JOINT, a similar consortium based in Silicon Valley, to work more closely with American chip designers and manufacturers. These efforts are meant to place Resonac early in customers’ development cycles, where material choices are made.

Risks to Watch

The Hitachi Chemical deal left Resonac with substantial debt, and the company still carries businesses that are cyclical and less profitable than its electronics materials. Semiconductor demand itself is cyclical, and memory makers can cut orders quickly in a downturn. Competition in packaging materials is rising from both Japanese peers and suppliers in South Korea, Taiwan and China. The success of the transformation will depend on how quickly Resonac can exit low-margin businesses and reduce debt.

Why It Matters for Overseas Partners

For chipmakers and OSATs (outsourced assembly and test companies), Resonac is a key source of packaging materials and a potential development partner through its consortia. For investors, it is one of the clearest examples of a Japanese conglomerate restructuring around a focused growth theme. For companies building packaging capacity in the US, Europe or Southeast Asia, Resonac’s US-JOINT activities offer a way to work with Japanese material know-how close to home.

Conclusion

Resonac is the result of a bold bet: that the future of Showa Denko lay not in aluminium or petrochemicals but in the small films and resins that hold advanced chips together. With AI pushing chip packaging to the centre of the semiconductor industry, that bet is now being tested in one of the fastest-growing parts of the market.