US vs China: Global chip makers head to Japan – 05/18/2023 – Tech

Seven of the world’s biggest semiconductor makers have unveiled plans to increase production and deepen technology partnerships in Japan, 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 Prime Minister Fumio Kishida, the leaders of chip factories including Taiwan Semiconductor Manufacturing, South Korea’s Samsung Electronics and the United States’ Intel and Micron outlined plans that could transform Japan’s prospects for a resurgence. as a semiconductor power.

Micron said it expects to invest up to 500 billion yen ($3.7 billion), including Japanese state subsidies, to build a factory to produce advanced technology in extreme ultraviolet lithography in Hiroshima.

Samsung is also discussing setting up a 30 billion yen (R$1 billion) research and development center in Yokohama with pilot lines for semiconductor devices. Japanese government officials said the move followed a thaw in relations between Tokyo and Seoul. Samsung was unavailable for comment.

“Japan’s role has increased as like-minded nations work to strengthen their supply chains,” Yasutoshi Nishimura, Japan’s minister of economy, trade and industry, said after meeting with top chip executives. “We reaffirm the strong potential of the Japanese semiconductor industry.”

The announcement comes as Japan prepares to host a G7 summit, where economic security will be the focus of negotiations. Semiconductors in particular have emerged as an area of ​​intense focus for the US and allies.

The easing of long-standing tensions between South Korea and Japan comes as the US mobilizes significant diplomatic capital to demand greater alignment among its allies in the region against the perceived threat of China’s expanding military and technological might and to reduce dependence on chips produced by TSMC and others in Taiwan.

TSMC, the world’s largest contract chip maker, also hinted at the prospect of further investment in Japan after agreeing to build a new factory in the southwestern prefecture of Kumamoto.

Nishimura also referred to talks with Intel about further cooperation with Japanese chip makers and said he discussed cooperation between Applied Materials, IBM and Japan’s Rapidus.

The meeting of chip makers in Tokyo adds to the definition of industrial blocs that are emerging as the sour US-China relations continue to produce signs of decoupling in global supply chains.

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

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

Nishimura said the government would use the 1.3 trillion yen earmarked from Japan’s supplementary budget last year to support pledges made by foreign chip makers.

Before the G7 summit, Kishida is due to meet US President Joe Biden on Thursday (18). The two leaders 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, according to a person involved. in the discussions.

Japan’s use of generous subsidies to lure chip makers is tempered by concerns that efforts to expand the semiconductor industry will be hampered by the country’s dwindling workforce, including a chronic shortage of engineers.

_{Translated by Luiz Roberto M. Gonçalves}