Seven of the world’s biggest semiconductor makers have laid out plans to increase production and deepen technical partnerships in Japan, as Western allies step up efforts to reform the global chip supply chain amid rising tensions with China.
At an unprecedented meeting in Tokyo with Japanese Prime Minister Fumio Kishida, the heads of chipmakers including Taiwan Semiconductor Manufacturing, South Korea’s Samsung Electronics and Intel and Micron of the US outlined plans that would boost Japan’s prospects for re-emerging as a semiconductor powerhouse can transform.
Micron said it expected to invest up to ¥500 billion ($3.7 billion), including Japanese state subsidies, to build a plant to produce advanced extreme ultraviolet lithography technology in Hiroshima.
Samsung is also discussing setting up a ¥30 billion research and development center in Yokohama with pilot lines for semiconductor devices. Japanese government officials said the move followed a strain in relations between Tokyo and Seoul. Samsung was not available for comment.
“Japan’s role has risen as like-minded nations work to strengthen their supply chains,” Yasutoshi Nishimura, Japan’s minister of economy, trade and industry, said after the meeting with chip chief executives. “We have reaffirmed the strong potential for the Japanese semiconductor industry.”
The announcement comes as Japan prepares to host a G7 summit where economic security will be a focus of talks. Semiconductors have particularly emerged as an area of intense focus for the US and allies.
The easing of long-standing tensions between South Korea and Japan comes as the US has deployed significant diplomatic capital to push for closer alignment among its allies in the region against the perceived threat of the expanding technological and military powers of China, and to reduce dependence on chips produced by TSMC and others in Taiwan.
TSMC, the world’s largest contract chipmaker, also raised the possibility of more investment in Japan after it agreed to build a new plant in the southwestern prefecture of Kumamoto.
Nishimura also referred to talks with Intel about greater cooperation with Japanese chip makers and said he had discussed cooperation between Applied Materials, IBM and Japan’s Rapidus.
The chipmakers’ meeting in Tokyo adds further definition to the industrial blocs emerging as soured relations between the United States and China continue to produce signs of decoupling in global supply chains.
“Investing in secure supply chains and a strategic partnership for your economic and national security is the most important cornerstone of confronting economic coercion,” Rahm Emanuel, the US ambassador to Japan, told the Financial Times.
Under an economic security law Japan enacted last year, the government declared semiconductors a product essential to daily life and economic activity.
Nishimura said the government would use ¥1.3tn in Japan’s supplementary budget last year to support the promises made by foreign chip makers.
Ahead of the G7 summit, Kishida will meet US President Joe Biden on Thursday. The leaders of the two countries are expected to announce a $70 million deal to educate and train 20,000 semiconductor engineers at 11 universities in the US and Japan, including Purdue University, Hiroshima University and Tohoku University, according to a person involved in the discussions.
Japan’s use of generous subsidies to attract chipmakers is tempered by concerns that efforts to expand the semiconductor industry will be scrutinized by the country’s shrinking workforce, including a chronic shortage of engineers.
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