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Column: Resuscitating Japan’s semiconductor industry serves U.S. national interest

  • November 2, 2021
  • , NIKKEI Business Daily , p. 2
  • JMH Translation

By Kagemusha (penname)

 

A plan to “resuscitate” the Japanese semiconductor industry is underway. The government of Kishida Fumio has created a new ministerial post to oversee economic security matters. A big investment project has also been confirmed. TSMC will build a semiconductor factory in Kumamoto Prefecture. Besides this, there are other projects under consideration to develop power semiconductor devices and stimulate domestic semiconductor demand by promoting digital transformation.

 

Japan used to control the global semiconductor market. Overtaken by South Korea, Taiwan, and China, it is now seen as an “underdog” in the global high-tech competition. But according to Omdia, a British research institution, Japan accounts for 19% of the global semiconductor output capacity (which includes Japanese plants of U.S. firms); 32% of the global semiconductor device market; and 56% of the global semiconductor materials market. Japan’s semiconductor industry foundation remains solid. There is hope that Japan will be able to take advantage of its technological edge in peripheral industries and rebuild its semiconductor ecosystem.

 

For many years, the government has failed on a number of occasions to rebuild the nation’s semiconductor sector. Is it truly possible to reverse this trend of decline? This time it might be.

 

The U.S. is committed to building a Japan-centered semiconductor supply chain. The interest of the Japanese semiconductor industry and U.S. national interests are aligned for the first time. In addition, the yen has been weakening. U.S. national interests and the yen-dollar exchange rate, both of which were out of Japan’s control, were two factors that had caused the Japanese high-tech industry to decline. Now these two factors have become a tailwind for Japan. As a result, Japan is in a different position from before.

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