Terahertz Innovation Ignites 6G Race: OKI and NTT Lead the Semiconductor Charge

The race to define 6G infrastructure is intensifying, and two Japanese tech giants—OKI Electric Industry and NTT—are staking their claim with a groundbreaking terahertz device breakthrough. Their collaboration, announced in June 2025, leverages heterogeneous material bonding to create high-power, cost-efficient terahertz components, positioning them at the forefront of next-gen semiconductor innovation. This advance isn't just a technical milestone; it's a strategic play to dominate 6G hardware markets worth an estimated $300 billion by 2030.

The Technical Leap: Heterogeneous Bonding Unlocks Terahertz Potential

Terahertz waves—long a theoretical promise for ultra-high-speed communication and non-invasive sensing—have been hampered by technical limitations. OKI and NTT's solution? Bonding indium phosphide (InP)-based photodiodes onto silicon carbide (SiC) substrates using OKI's proprietary crystal film bonding (CFB) technology. This method achieves near-perfect bonding yields (99% vs. 50% for conventional approaches) by precisely attaching only the necessary InP crystal portions to SiC wafers. The result? Devices with 10x higher output power (exceeding 1 mW at the critical 1dB compression point) and one-third the dark current of prior designs.

The innovation's genius lies in its material pairing. SiC's high thermal conductivity addresses heat dissipation—a longstanding bottleneck for terahertz devices—while InP's optoelectronic properties enable efficient photon detection. Together, they create a platform capable of supporting 6G's demand for multi-terabit-per-second data rates and sub-millisecond latency, far beyond 5G's capabilities.

Market Demand: 6G and Beyond

The strategic significance of this breakthrough is twofold:
1. 6G Communication: Terahertz waves (0.1–10 THz) offer unmatched bandwidth for high-capacity networks, ideal for applications like autonomous vehicle coordination, holographic data transmission, and real-time AI processing. Early adopters like South Korea and Japan aim to commercialize 6G by 2030, creating a $120 billion market for core infrastructure components by 2035.
2. Non-Destructive Sensing: The technology's ability to penetrate materials without harmful radiation (unlike X-rays) opens doors to advanced applications in aerospace (flaw detection in composites), automotive (battery integrity checks), and healthcare (early tumor detection). This sector alone could exceed $50 billion by 2040, per McKinsey.

Supply Chain & Competitive Advantages

OKI and NTT's approach offers three critical advantages over rivals:
- Cost Efficiency: By using <10% of an InP wafer's surface area, they slash material waste—a stark contrast to rivals relying on full-wafer InP substrates, which are 10x more expensive.
- Scalability: The CFB process aligns with existing SiC manufacturing lines, enabling seamless integration into semiconductor fabs.
- Ecosystem Strength: Backed by Japan's National Institute of Information and Communications Technology (NICT) and leading universities (Osaka, Kyushu, Tokyo), their R&D pipeline is fortified for rapid commercialization.

Strategic Partnerships and Investor Opportunities

The duo's partnership strategy is equally shrewd. By targeting collaborations with global telecom giants (e.g., Ericsson, Samsung) and exhibiting at Munich's Laser World of Photonics, they're accelerating industry buy-in. Meanwhile, their focus on environmental sustainability—minimizing rare material use—aligns with ESG-driven investment trends.

For investors, the key question is: How does this translate to stock performance?

While OKI's and NTT's valuations have lagged semiconductor peers like Intel (INTC) or Taiwan Semiconductor (TSM) in recent quarters, this breakthrough could reposition them as long-term winners. Analysts at Nomura estimate OKI's terahertz division alone could add ¥50 billion ($350 million) in annual revenue by 2028, assuming 20% market penetration. NTT, with its broader telecom ecosystem, stands to benefit from bundling these chips into 6G base stations and enterprise solutions.

Risks and Considerations

• Global Competition: U.S. firms like MIT's Terahertz Lab and China's Huaxin Semiconductor are racing to close the gap.
• Time to Market: Mass production by FY2026 hinges on resolving yield bottlenecks in full-scale manufacturing.
• Regulatory Hurdles: Spectrum allocation for terahertz bands remains undecided globally.

Investment Takeaway

OKI and NTT's terahertz innovation isn't just a technical win—it's a strategic moat in the 6G arms race. Their focus on cost-efficient scaling, paired with Japan's leadership in semiconductor materials, makes them core holdings for investors betting on next-gen connectivity. With terahertz applications spanning 6G, healthcare, and manufacturing, this duo is primed to capture double-digit revenue growth over the next decade.

For portfolios, consider a gradual buildup in OKI (6703.T)—its smaller market cap offers higher upside—and add NTT (9432.T) as a stabilizing anchor. Monitor their progress at Munich's Laser World and partnerships with global telecom leaders for near-term catalysts. The 6G era is coming, and these pioneers are writing its rules.