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(Bloomberg) -- The world’s most advanced and delicately fine-tuned semiconductors wouldn’t be possible without the aid of giant steel storage tanks built by a little-known Tokyo company founded in 1927.
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Valqua Ltd. makes specialized, super clean containers for storing essential chipmaking chemicals, and it expects to hit its highest sales ever this fiscal year. It’s by far the world’s largest supplier of such tanks, dwarfing a clutch of smaller competitors in places like Taiwan, and providing almost every tank used by the world’s biggest contract chipmaker, Taiwan Semiconductor Manufacturing Co., according to Ichiyoshi Research Institute analyst Mitsuhiro Osawa.
Valqua is part of a loose network of Japanese manufacturers that dominate a niche but indispensable segment of the global chip supply chain. Disco Corp., for instance, is the industry’s go-to supplier of silicon wafer cutters, while JSR Corp. provides the high-purity chemicals that Valqua stores at chip plants.
“A molecular-level impurity would make the whole chemical solution in a tank useless, as it would drastically degrade the production yields of cutting-edge chipmaking,” Valqua President Yoshihiro Hombo said in an interview. “We and chemical makers support the complete supply chain by making, transporting and storing these solutions under ultra-clean conditions, and that is not something that can be easily replicated.”
Valqua gets more than half its sales from semiconductor makers and its close-knit relationship with the chip sector helps it stand out among industry peers. At $470 million, it’s Japan’s most valuable supplier of mechanical rubber products after doubling its share price over the past three years, from just before the pandemic. Valqua shares jumped in January after it reported a 41% leap in operating profit, and its president is confident revenue will grow by at least 30% over the next four years.
Chipmaking customers aren’t showing signs of slowing spending even as demand has fallen dramatically from its pandemic highs, Hombo said. Samsung Electronics Co., the other giant of chipmaking beside TSMC, makes its own containers. Valqua’s stock climbed as much as 2.1% Monday, outpacing a weak market.