Japan's Strategic Investment in Semiconductor Manufacturing

On Monday, Japan's Prime Minister Shigeru Ishiba unveiled an ambitious €61 billion plan aimed at revitalizing the nation's semiconductor industry and fostering advancements in artificial intelligence (AI). The initiative outlines plans to provide a minimum of 10 trillion yen ($61 billion) in funding by 2030, taking significant steps to close the gap with global leaders in chip technology. This announcement came amidst a backdrop of increasing tensions in global trade, particularly between the United States and China, as well as concerns surrounding geopolitical stability in regions like Taiwan.

Aiming for Enhanced Production Capabilities

The strategic plan not only seeks to support innovative chip production methods but also aims to bolster the mass manufacturing of next-generation semiconductors. Central to the initiative is Rapidus, a state-sponsored consortium tasked with enhancing Japan's semiconductor capabilities. Rapidus includes major firms such as Kioxia (formerly Toshiba), NEC, Sony, and Toyota. Established two years ago, Rapidus has ambitious goals to begin mass-producing cutting-edge 2-nanometer processors with support from U.S. companies like IBM and Imec, a leader in nano and microelectronics based in Belgium. Production is slated to start on Japan's northernmost island of Hokkaido by 2027.

A Broader Economic Strategy

The semiconductor initiative is a component of a much larger economic strategy seeking Cabinet approval on November 22. The proposed plan will guide investments from both public and private sectors, potentially amounting to at least 50 trillion yen (€305 billion) over the next decade. Historically, Japan was once a powerhouse in semiconductor production during the 1990s but has seen a decline similar to that of Europe since the early 2000s. According to market analyses, while Japan currently accounts for 20 percent of the global chip production, much of this output is based on older technologies with structure sizes in the double-digit nanometer range. As such, the nation is looking to reclaim its position among the leaders in semiconductor production.

Global Context of Chip Production

Japan's efforts are mirrored by similar initiatives in the United States and Europe. In recent years, semiconductor production has escalated in importance due to national security concerns, given that chips are integral to nearly every modern electronic device, from smartphones and computers to advanced military systems. The U.S. has recognized its growing dependence on foreign supply chains, particularly concerning China, and has initiated a subsidy rollout to amplify domestic chip production through programs like the Chips and Science Act, which also benefits defense sectors.

Similarly, the European Union and Germany are making strides to enhance local semiconductor manufacturing capabilities in response to these trends. The European Chips Act aims to draw more advanced chip production to Europe, aiding the local microelectronics industry and decreasing reliance on external sources from the U.S. and China.

These collaborative moves across global markets illustrate the urgency and competitive nature of the semiconductor landscape as countries seek to secure their future technological independence and leadership.

This content was originally reported by Heise Online.