Industry heads gather in Japan to give their backing to 'friend-shoring'
May 18, 2023 05:01
TOKYO -- Efforts by the U.S. and its allies to secure supplies of crucial chip technology took center stage on Thursday as world leaders and business executives gathered in Japan ahead of the Group of Seven summit.
Japan will host the G-7 summit in the western city of Hiroshima starting on Friday. Supply chain resilience, including for semiconductors, will likely be a key item on the agenda for the leaders amid a fluid geopolitical environment.
U.K. Prime Minister Rishi Sunak is expected to announce a semiconductor partnership with Japan during a visit to Tokyo on Thursday, as the U.K. seeks to reduce geopolitical risk by diversifying its chip supply chain. Also on Thursday, Japanese Prime Minister Fumio Kishida encouraged more investment in Japan's chip industry as he met with executives from seven major semiconductor companies from South Korea, Taiwan, the U.S. and Europe.
The U.K. is not a major chip manufacturer, but it is home to leading global chip design companies ARM and Imagination Technologies. It is also home to companies developing compound semiconductors, or chips made from materials other than silicon, which are touted to use less energy.
The country's semiconductor strategy will emphasize the need for Britain to reduce its dependence on semiconductor imports from geopolitically sensitive parts of the world such as Taiwan.
Economic security is a priority at the G-7 summit as the U.S. and its allies try to maintain their technological lead over China.
The world's second-largest economy has used its vast market to draw foreign investment and obtain cutting-edge technologies from Western companies in its drive to become a global tech power by 2049 -- the 100th anniversary of the founding of the People's Republic of China. The U.S. argues that it is essential for the West to maintain its lead in order to defend the current international order.
At the core of the U.S.-Sino tech race is artificial intelligence and its key enabler, semiconductors. Much of the world's chip production takes place in Taiwan and South Korea -- a fact that can leave the West vulnerable to geopolitical shocks.
While Washington has been crafting policies intended to bring chip production back to the U.S., the gathering in Tokyo on Thursday is a signal that the U.S. wants to prioritize "friend-shoring" over "reshoring," while also indicating a willingness to work with allies to deal with the challenge of China's rise.
Concrete initiatives are already underway. U.S. chipmaker Micron Technology said in an interview with Nikkei that the company will invest up to 500 billion yen ($3.6 billion) in Japan over the next few years.
Talks have also been underway between Kioxia and Western Digital, leading makers of flash memory, about a possible merger.
South Korea's Samsung Electronics is also building a development facility in the Japanese city of Yokohama, a move that could kick-start collaboration between the countries' chip industries following recent signs of a political rapprochement.
Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, has already unveiled plans to invest billions of dollars in Kumamoto, Japan to produce logic chips.
The meeting at the prime minister's office in Tokyo involved TSMC Chairman Mark Liu, Intel CEO Pat Gelsinger and Micron Technologies CEO Sanjay Mehrotra, as well as executives from Samsung Electronics, IBM, Applied Materials and Belgian research group IMEC.
"The Japanese government will make concerted efforts to further expand direct investment in Japan and support the semiconductor industry," Kishida told the executives.
"We will lead discussions and strengthen collaboration on the global issue of supply chain stability," the prime minister stressed.
Yasutoshi Nishimura, Japan's minister of economy, trade and industry who was also present at the meeting, told reporters afterward: "Many companies talked about positive initiatives and increased investment in Japan."
Samsung talked about the opening of the center in Yokohama, and TSMC mentioned its increased investment in Japan. Intel indicated plans to strengthen ties with Japanese materials and semiconductor equipment manufacturers, according to officials.
Kishida wants to spur even greater investment by the chipmakers, offering sustained support through subsidies.
Japan once produced half the world's semiconductors but has since been overshadowed by the U.S., South Korea and Taiwan, with China gaining ground as well. Tokyo devised a semiconductor and digital strategy in 2021, and has budgeted 2 trillion yen ($14.7 billion) in a bid to make a comeback.
In addition to supporting domestic chipmakers, Japan is courting foreign players. These efforts have paid off with projects like a new TSMC plant in Kumamoto and Micron expanding its Hiroshima facility.
Demand for semiconductors in applications like electronics and autos is expected to keep growing. The key role they play in decarbonization and digitalization efforts means that a stable supply is important for Japan's economic security. The government aims to triple domestic sales of semiconductors and related products to 15 trillion yen by 2030.
asia.nikkei.com
May 18, 2023 05:01
TOKYO -- Efforts by the U.S. and its allies to secure supplies of crucial chip technology took center stage on Thursday as world leaders and business executives gathered in Japan ahead of the Group of Seven summit.
Japan will host the G-7 summit in the western city of Hiroshima starting on Friday. Supply chain resilience, including for semiconductors, will likely be a key item on the agenda for the leaders amid a fluid geopolitical environment.
U.K. Prime Minister Rishi Sunak is expected to announce a semiconductor partnership with Japan during a visit to Tokyo on Thursday, as the U.K. seeks to reduce geopolitical risk by diversifying its chip supply chain. Also on Thursday, Japanese Prime Minister Fumio Kishida encouraged more investment in Japan's chip industry as he met with executives from seven major semiconductor companies from South Korea, Taiwan, the U.S. and Europe.
The U.K. is not a major chip manufacturer, but it is home to leading global chip design companies ARM and Imagination Technologies. It is also home to companies developing compound semiconductors, or chips made from materials other than silicon, which are touted to use less energy.
The country's semiconductor strategy will emphasize the need for Britain to reduce its dependence on semiconductor imports from geopolitically sensitive parts of the world such as Taiwan.
Economic security is a priority at the G-7 summit as the U.S. and its allies try to maintain their technological lead over China.
The world's second-largest economy has used its vast market to draw foreign investment and obtain cutting-edge technologies from Western companies in its drive to become a global tech power by 2049 -- the 100th anniversary of the founding of the People's Republic of China. The U.S. argues that it is essential for the West to maintain its lead in order to defend the current international order.
At the core of the U.S.-Sino tech race is artificial intelligence and its key enabler, semiconductors. Much of the world's chip production takes place in Taiwan and South Korea -- a fact that can leave the West vulnerable to geopolitical shocks.
While Washington has been crafting policies intended to bring chip production back to the U.S., the gathering in Tokyo on Thursday is a signal that the U.S. wants to prioritize "friend-shoring" over "reshoring," while also indicating a willingness to work with allies to deal with the challenge of China's rise.
Concrete initiatives are already underway. U.S. chipmaker Micron Technology said in an interview with Nikkei that the company will invest up to 500 billion yen ($3.6 billion) in Japan over the next few years.
Talks have also been underway between Kioxia and Western Digital, leading makers of flash memory, about a possible merger.
South Korea's Samsung Electronics is also building a development facility in the Japanese city of Yokohama, a move that could kick-start collaboration between the countries' chip industries following recent signs of a political rapprochement.
Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, has already unveiled plans to invest billions of dollars in Kumamoto, Japan to produce logic chips.
The meeting at the prime minister's office in Tokyo involved TSMC Chairman Mark Liu, Intel CEO Pat Gelsinger and Micron Technologies CEO Sanjay Mehrotra, as well as executives from Samsung Electronics, IBM, Applied Materials and Belgian research group IMEC.
"The Japanese government will make concerted efforts to further expand direct investment in Japan and support the semiconductor industry," Kishida told the executives.
"We will lead discussions and strengthen collaboration on the global issue of supply chain stability," the prime minister stressed.
Yasutoshi Nishimura, Japan's minister of economy, trade and industry who was also present at the meeting, told reporters afterward: "Many companies talked about positive initiatives and increased investment in Japan."
Samsung talked about the opening of the center in Yokohama, and TSMC mentioned its increased investment in Japan. Intel indicated plans to strengthen ties with Japanese materials and semiconductor equipment manufacturers, according to officials.
Kishida wants to spur even greater investment by the chipmakers, offering sustained support through subsidies.
Japan once produced half the world's semiconductors but has since been overshadowed by the U.S., South Korea and Taiwan, with China gaining ground as well. Tokyo devised a semiconductor and digital strategy in 2021, and has budgeted 2 trillion yen ($14.7 billion) in a bid to make a comeback.
In addition to supporting domestic chipmakers, Japan is courting foreign players. These efforts have paid off with projects like a new TSMC plant in Kumamoto and Micron expanding its Hiroshima facility.
Demand for semiconductors in applications like electronics and autos is expected to keep growing. The key role they play in decarbonization and digitalization efforts means that a stable supply is important for Japan's economic security. The government aims to triple domestic sales of semiconductors and related products to 15 trillion yen by 2030.
Chips at center of G-7 discussion of how to counter China's rise
Industry heads gather in Japan to give their backing to 'friend-shoring'
asia.nikkei.com