Vogon Today

Selected News from the Galaxy


Chip, all Japan’s moves to bring manufacturing back home

Chip, all Japan's moves to bring manufacturing back home

Japan wants to recover semiconductor manufacturing capacity: in addition to subsidizing the Tsmc factory, it has brought together the large national technology companies to develop 2-nanometer chips. All the details

Japan is working on launching an ambitious industrial policy plan to bring advanced semiconductor manufacturing back home: they are essential electronic components for a large number of sectors, from automotive to consumer electronics, of which Tokyo was a major producer until about twenty years ago, when it gradually began to lose market share compared to other Asian countries, such as Taiwan and South Korea.


The plan for the recovery of microchip manufacturing power is part of a broader economic security strategy developed by the administration of Prime Minister Fumio Kishida to protect domestic industries from any future supply disruptions, after the numerous bottlenecks to global supply chains caused by the pandemic of COVID-19.

There is a second goal, actually. As Foreign Policy explains, the focus on chips fits into a vast defense mobilization program aimed at thwarting China's ambitions for economic and political primacy. Like the United States, Japan too feels threatened by the rise of China . And semiconductors are also essential for the functioning of advanced weapon systems (missiles and more).


In recent months, Joe Biden's United States has introduced new export control measures to China of products and services (regardless of the nationality of the seller) containing American intellectual property or artifacts related to chips. The aim is to prevent China from accessing advanced technologies, strategic for both economic and military progress. Washington has asked allied nations, such as the Netherlands and Japan, to participate in this effort to isolate Beijing.


Returning to Japan, Foreign Policy points out that this "combination of security and economic nationalism" of the Kishida government seems destined to remain, carried forward by the "new generation" of the conservative Liberal Democratic Party, which since its foundation in 1955 has almost always been in charge of the country. This group of hawks , which has formed around influential former Prime Minister Shinzo Abe, "seems intent on abandoning much of the caution that has characterized Japan's economic and diplomatic policy."


Japan is in a phase of "relative decline" and doesn't quite know how to get out of it: economic growth is sluggish and the population is ageing.

Instead, between the 1960s and 1980s it reached second place in the ranking of the states with the highest GDP in the world through a statist approach – led by the Ministry of International Trade and Industry – which combined economic planning, business cooperation and trade barriers to reduce foreign competition. Companies such as Sony, Panasonic and Toyota established themselves worldwide thanks to the high quality of their products. Not only that: in 1990 the Nippon Steel Corporation was the largest steel producer in the world, and six of the ten largest banks in the world were Japanese.

In exchange for government meddling, companies guaranteed social stability by offering their employees lifelong jobs.


In 1988, Japan was worth 51 percent of the global semiconductor market, but today it is dominated by Taiwanese and South Korean players. However, Japanese companies retain a significant position in the microchip supply chain because they produce many of the chemicals needed for chipmaking processes.

Foreign Policy wonders if these niche sectors are enough to sustain the third largest economy on the planet in the long term. Probably not, which is why the Japanese authorities have been working to bring the manufacture of Taiwanese TSMC to the national territory. It is the world's largest semiconductor maker, and plans to open an $8.6 billion chip factory in Japan. The Ministry of Economy, Trade and Industry (the successor to the old Ministry of International Trade and Industry) will cover 40 per cent of the costs of the project, in which Sony is also involved.

However, it is not obvious that Japanese companies will be able to absorb and replicate TSMC's know-how in the manufacture of advanced microchips.


The Ministry of Economy, Trade and Industry has brought together some of Japan's leading technology companies, such as Sony, Toyota and SoftBank in a project called Rapidus to develop and manufacture 2-nanometer chips – the fastest microchips advanced ones currently in production ( from TSMC in Taiwan ) are from 3 nanometers. The Rapidus consortium collaborates with the US IBM and expects to invest 36 billion dollars within ten years: the Japanese government will provide subsidies for approximately 500 million dollars.

Rapidus president Atsuyoshi Koike (former Western Digital executive) called it Japan's "last chance" to get back into the chip market.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/giappone-microchip-avanzati-progetto-rapidus/ on Sun, 15 Jan 2023 06:49:11 +0000.