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    Home » Japan’s Semiconductor Industry: A Second Chance in the Global Race
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    Japan’s Semiconductor Industry: A Second Chance in the Global Race

    November 2, 20233 Mins Read
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    Japan’s semiconductor industry is on the cusp of a potential resurgence. With its comprehensive plan, commitment to investment, and early successes, Japan has positioned itself to become a major player in the global semiconductor race once again.

    The Race for Semiconductor Supremacy: Japan’s Strategy vs the US

    The global race for semiconductor dominance is heating up, with Japan and the US taking two distinct approaches. While the US aims for a more ambitious strategy, Japan’s focused plan is considered more likely to succeed.

    Japan’s Stronghold in the Chip Supply Chain

    Japan has long held a leadership position in key areas of the chip supply chain, particularly in equipment and chemicals. Despite this, other components such as testing and packaging can be sourced relatively nearby in Asia. However, the recent Chips Act introduced in the US doesn’t fully address these supply chain concerns.

    The Power of a Centralized Government

    One advantage that Japan holds over the US is its centralized government structure. This allows for smoother navigation of obstacles that are inherent in large and complex projects. In contrast, the US faces challenges related to multiple jurisdictions and ongoing litigation. Sujai Shivakumar, head of CSIS’ Renewing American Innovation Project, believes that revisiting environmental laws from the 1970s could help streamline future projects.

    Cost Considerations

    In addition to its government support, Japan also offers cost advantages in terms of key inputs such as construction and labor. This affordability is attractive to chip manufacturers, according to Christopher Miller, a professor at the Tufts Fletcher School who specializes in the chip sector.

    Japan’s Long-Term Ambitions

    Despite these advantages, Japan Inc. has ambitious plans of its own in the semiconductor industry. A venture named Rapidus, consisting of a dozen top Japanese companies, along with IBM and the government, aims to produce 2-nanometer chips by 2027. However, some experts, like Shivakumar, remain skeptical about this leapfrogging approach.

    Taiwan’s Role in Semiconductor Manufacturing

    Although both Japan and the US are striving to achieve semiconductor independence, Taiwan remains a critical player. The most advanced chips will still be made in Taiwan due to its unique expertise and infrastructure, says Mario Morales, the head of semiconductor research at IDC.

    In conclusion, while both Japan and the US have their respective strategies to solidify their positions in the semiconductor space, the ultimate success lies in resilient and innovative solutions. Only time will tell which approach proves to be the winning formula.

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