Japan is concerned that the U.S. plans to pump billions of dollars into chip production to compete with China could seal the fate of a Japanese semiconductor industry that once dominated the planet.<\/p>\n\n\n\n
With China and the U.S. ramping up support for the production of chips that cover everything from smartphones to missiles, driven by a trade war and security concerns, officials fear that Japan will be left behind altogether.<\/p>\n\n\n\n
Japanese officials fear that the U.S. may tempt other firms to follow suit by luring Asian chip industry giants such as Taiwan’s Semiconductor Manufacturing Co Ltd onto American soil.<\/p>\n\n\n\n
“It’s possible for companies to build in Japan and export, but the closer you can be as a supplier the better, it’s easier to exchange information,” said Kazumi Nishikawa, director of IT at METI.<\/p>\n\n\n\n
The technology companies Nishikawa is worried about moving to the U.S. are wafer makers Shin-Etsu Chemical and Sumco Corp, photoresist supplier JSR Corp, and manufacturing machinery makers Screen Holdings and Tokyo Electron.<\/p>\n\n\n\n
So far, none of the companies has announced plans to move production to the U.S.<\/p>\n\n\n\n
Japanese Prime Minister Yoshihide Suga’s government recently approved a strategy devised by Nishikawa’s team at METI to ensure that Japan has enough chips to compete in technologies that will drive future economic growth, such as artificial intelligence, high-speed 5G connectivity, and self-driving vehicles.<\/p>\n\n\n\n
One plan is to turn Japan into an Asian data centre hub, generating huge demand for semiconductors that could potentially entice chip makers to build plants on Japanese soil.<\/p>\n\n\n\n
But the success of Japan’s industrial policy will depend on financial resources.<\/p>\n\n\n\n
The country has already allocated 500 billion yen to revitalize technology supply chains, help businesses overcome chip shortages and other semiconductors during the coronavirus pandemic, and promote a shift to 5G.<\/p>\n\n\n\n
The U.S. Senate has approved a bill that allocates $190 billion of public money to new technologies, including $54 billion for chips alone, while the European Union plans to allocate 135 billion euros towards developing its own digital economy.<\/p>\n\n\n\n
Japan would have to provide larger sums that the country could otherwise spend on health and welfare.<\/p>\n\n\n