Global chipmakers are expanding in Japan as the technological chapter accelerates

Seven of the world’s largest semiconductor makers have laid out plans to ramp up manufacturing and deepen technology partnerships in Japan as Western allies step up efforts to reshape the global chip supply chain amid rising tensions with China.

In an unprecedented meeting in Tokyo with Japanese Prime Minister Fumio Kishida, the heads of chipmakers including Taiwan Semiconductor Manufacturing Co., South Korea’s Samsung Electronics Co. and Intel and Micron from the United States described plans that could transform the prospects of Japan’s re-emergence as a power. for semiconductors.

Micron said it expects to invest up to 500 billion yen ($3.7 billion), including Japanese government subsidies, to build a factory to produce state-of-the-art ultraviolet lithography in Hiroshima.

Samsung is also discussing setting up a 30 billion yen research and development center in Yokohama with semiconductor device pilot lines. Japanese government officials said the move came after a thaw in relations between Tokyo and Seoul. Samsung was not available for comment.

“Japan’s role has risen as like-minded countries strengthen their supply chains,” said Yasutoshi Nishimura, Japan’s Minister of Economy, Trade and Industry, after meeting with the chip CEOs. “We have reaffirmed the strong potential of Japan’s semiconductor industry.”

The announcement comes as Japan prepares to host a G7 summit where economic security will be a focus of the talks. Semiconductors in particular have emerged as an intense area of ​​focus for the United States and its allies.

The easing of long-running tensions between South Korea and Japan comes as the United States is deploying significant diplomatic capital to urge closer alignment among its allies in the region against the perceived threat of expanding China’s technological and military powers, and reducing reliance on chips produced by TSMC. and others in Taiwan.

TSMC, the world’s largest chipmaker, also expressed the possibility of increasing investment in Japan after it agreed to build a new factory in the southwestern Kumamoto Prefecture.

Nishimura also referred to talks with Intel about greater cooperation with Japanese chipmakers and said he had discussed collaboration between Applied Materials, IBM and Japan’s Rapidus.

The gathering of chipmakers in Tokyo adds more definition to the industrial conglomerates emerging as strained relations between the United States and China continue to produce signs of a disconnect in global supply chains.

“Investing in secure supply chains and strategic partnership for your economic and national security is a key cornerstone to countering economic coercion,” Rahm Emanuel, the US ambassador to Japan, told the Financial Times.

Under the Economic Security Law that Japan enacted last year, the government declared semiconductors an essential product for daily life and economic activity.

Nishimura said the government would use the 1.3 trillion yen allocated in Japan’s supplementary budget last year to support pledges made by foreign chipmakers.

Ahead of the G7 summit, Kishida is scheduled to meet US President Joe Biden on Thursday. The two countries’ leaders are expected to announce a $70 million deal to educate and train 20,000 semiconductor engineers at 11 universities in the United States 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 eases fears that efforts to expand its semiconductor industry will be weakened by the country’s shrinking workforce, including a chronic shortage of engineers.

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