# Towa plans Kyoto plant to onshore chip packaging equipment *The 5 billion yen facility in Ujitawara will produce resin compression molding systems for artificial intelligence chips starting in 2029 to curb overseas supply risks.* **Published:** October 7, 2026 **By:** Kenji Sato **Section:** Semiconductors & AI Hardware — Japan **Format:** Company Watch **Confidence:** medium **Source:** https://eastasiabrief.com/semiconductors/towa-plans-kyoto-plant-onshore-chip-packaging-equipment-578 **Publisher:** East Asia Brief (https://eastasiabrief.com/) --- ## What to know - Towa will invest 5 billion yen ($31.6 million) in a 5,000-square-meter packaging tool plant in Kyoto - Assembly shifts from overseas plants in China and Malaysia to a Japanese mother factory - Commercial operations begin in 2029 following commercial rollout of INNOMS in August 2026 ![Technicians in cleanroom suits observe robotic arms operating along a semiconductor equipment assembly line. (AI-generated image)](https://eastasiabrief.com/media/2026-10-07-294970f36946.webp) *Technicians in cleanroom suits observe robotic arms operating along a semiconductor equipment assembly line. (AI-generated image)* Towa Corporation announced plans on Oct. 6, 2026, to construct a semiconductor manufacturing equipment plant in Kyoto Prefecture, moving assembly back to Japan to reinforce domestic supply chains. The Kyoto-based toolmaker will invest approximately 5 billion yen ($31.6 million) in the project. That capital outlay equals roughly 8% of the company's projected 64 billion yen ($400 million) consolidated revenue for fiscal 2026. The planned facility will cover 5,000 square meters within the company's existing Kyoto East Plant in Ujitawara. The factory will manufacture automated systems that encapsulate silicon microchips in protective epoxy resin. Resin encapsulation seals fragile semiconductor dies against physical stress, atmospheric humidity and heat. The process is critical for advanced packaging architectures that combine graphic processors with high-bandwidth memory. Towa holds roughly two-thirds of the global market for semiconductor transfer molding systems, making it the dominant supplier worldwide. The company also leads the market in specialized compression molding equipment. Chief Executive Hirokazu Okada announced the domestic investment plan in an interview published Oct. 6. Okada said higher overseas operating costs and currency movements prompted the company to reassess foreign operations. Towa has traditionally relied on domestic subcontractors and offshore plants in China and Malaysia for machine assembly. The Ujitawara project establishes an internal domestic mother factory to handle final tool integration. A weaker Japanese yen has reduced the financial advantages of outsourcing assembly to Southeast Asia and China. Meanwhile, escalating trade frictions between Washington and Beijing have heightened operational risks across cross-border supply networks. The new Kyoto factory will produce Towa's next-generation compression molding system, marketed under the INNOMS brand name. Towa announced the product line on May 11, 2026, and began commercial shipments in August. INNOMS doubles packaging output per machine compared with older systems, according to technical disclosures from the company. The design reduces unit mass-production packaging costs for semiconductor manufacturers by approximately 50%. The tool also lowers power requirements and saves cleanroom floor space. Towa engineered the platform to support larger substrate dimensions, including panel-level packaging formats that process chips on rectangular carrier plates. Compression molding submerges silicon dies directly into liquid or granular resin within a vacuum chamber. The technique eliminates the high-pressure resin flow that can bend micro-wires and damage stacked dies during transfer molding. The compression method has become central to high-bandwidth memory production. Memory makers vertically stack multiple dynamic random-access memory dies connected by through-silicon vias, requiring void-free resin fill to prevent thermal failures. Towa pioneered multi-plunger transfer molding in 1979, establishing an encapsulation standard used by semiconductor packaging plants globally. Over four decades, the Kyoto manufacturer expanded from mold dies into fully automated assembly systems. Retaining final machine assembly in Japan protects proprietary mechanical designs. Assembling equipment internally shields patents covering high-pressure clamping, thermal sensors and automated resin dispensers from unauthorized disclosure at external facilities. Towa reported record consolidated revenue for the fiscal year ended March 2026, lifted by capital spending on artificial intelligence data centers. Orders for compression molding dies reached an all-time high during the period. Capital investment by memory manufacturers in Taiwan and China supported tool shipments over the past year. Growing demand for advanced packaging has offset cost pressures from initial deliveries of newer compression platforms. Packaging equipment suppliers face changing commercial conditions across East Asia. Chinese industrial authorities now enforce domestic sourcing rules requiring local semiconductor fabs to purchase more than 50% of equipment from Chinese vendors. Those localization rules contributed to lower sales for Japanese front-end wafer fabrication toolmakers in mainland China. In contrast, advanced back-end packaging equipment faces fewer domestic substitutes, sustaining export demand for specialized Japanese tools. Japan has also moved to rebuild domestic semiconductor manufacturing, subsidizing advanced foundry construction and packaging research facilities. Expanding domestic packaging capacity provides Japanese equipment suppliers with a growing local customer base. Towa expects the new Ujitawara factory to begin commercial operations in 2029. The site will consolidate precision engineering, automated sub-assembly and complete machine verification on a single manufacturing campus. Towa has not published a formal timely disclosure filing on the Tokyo Stock Exchange regarding the project. The company has not announced construction milestones, contractor selections or specific equipment installation dates. ## Impact map | Event | Korea | China | Japan | Global impact | | --- | --- | --- | --- | --- | | domestic packaging tool plant | memory suppliers retain access to specialized compression molding tools for HBM | packaging equipment demand remains steady while front-end tool sourcing localizes | Towa invests 5 billion yen to retain molding tool assembly and intellectual property | advanced packaging equipment capacity expands to support AI accelerator back-end manufacturing | ## In this story - **Companies:** Towa Corporation - **Tickers:** 6315.T - **Policy:** Economic Security, Supply Chain - **Impact:** Capex, Supply Chain, Production ## Primary sources 1. traders.co.jp 2. vibetrader.com 3. note.com 4. towajapan.co.jp 5. yahoo.co.jp --- Cite as: East Asia Brief, "Towa plans Kyoto plant to onshore chip packaging equipment," October 7, 2026. https://eastasiabrief.com/semiconductors/towa-plans-kyoto-plant-onshore-chip-packaging-equipment-578