Global chip makers will expand in Japan as tech decoupling accelerates

Seven of the world’s biggest semiconductor makers plan to increase manufacturing in Japan and deepen technology partnerships 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 chip makers including Taiwan Semiconductor Manufacturing, South Korea’s Samsung Electronics and the US’s Intel and Micron described plans that would re-establish Japan as a semiconductor powerhouse. Emergence prospects can change.

Micron said it expected to invest up to ¥500 billion ($3.7 billion), including Japanese state subsidies, to produce state-of-the-art extreme ultraviolet lithography technology in Hiroshima.

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

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

The announcement comes at a time when Japan is preparing to host the G7 summit where economic security will be the focus of the talks. Semiconductors in particular have emerged as an area of ​​intense focus for the US and allies.

Long-running tensions between South Korea and Japan eased as the US urged closer alignment between its allies in the region against the perceived threat of China’s growing technological and military power and reliance on chips produced by TSMC. has deployed significant diplomatic capital to reduce and others in Taiwan.

TSMC, the world’s largest contract chip maker, raised the prospect of more investment in Japan after agreeing to build a new plant in the southwestern prefecture of Kumamoto.

Nishimura also mentioned talks with Intel on greater collaboration with Japanese chip makers and said he had discussed a collaboration between Applied Materials, IBM and Japan’s Rapidus.

The chip makers’ gathering in Tokyo adds further definition to the industry bloc that is emerging as US-China relations sour and continue to show signs of alienation in global supply chains.

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

Under an economic security law that Japan enacted last year, the government declared semiconductors as essential products for daily life and economic activity.

Nishimura said the government would use ¥1.3tn earmarked in Japan’s supplementary budget last year to support promises made by foreign chip makers.

Kishida is scheduled to meet US President Joe Biden on Thursday ahead of the G7 summit. According to a person involved in the discussions, 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. Universities included.

Japan’s use of generous subsidies to attract chip makers is undercut by concerns that efforts to expand the semiconductor industry will be undermined by the country’s shrinking workforce, including a chronic shortage of engineers.