Japan begins bidding to regain semiconductor crown


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Greetings from Tokyo. Our strange state of purgatory continues: Covid-19 is not bad, but the promotion of vaccines in Japan is only gaining momentum, so normal life is still suspended. Of course, the biggest news event is the Olympics, which will start in 25 days. Now it is almost certain that the game will be held. Whether anyone manages to enjoy them is another matter.

Away from the Olympics, Prime Minister Yoshihide Suga launched his First growth strategy, Which has a major impact on the semiconductor industry-the subject of today’s note. In essence, Japan has made it a priority to rebuild its semiconductor manufacturing sovereignty capabilities and maintain tighter control over its cutting-edge technology that is still an important participant. This marks another step away from the globalization of the chip industry.

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Is it “Japan’s No. 1” again?

During the glorious period of the 1980s, Japan dominated the chip industry, with a global market share of more than 50%.That was the era of Ezra Vogel’s book JApan as the first, Hollywood’s criticism of Japanese films and the US-Japan semiconductor agreement aimed at hindering Japanese industry is what it achieved, although it is more beneficial to South Korea and Taiwan than the United States.

The heyday of the Japanese chip industry was short and brilliant. Since about 1988, Japan’s market share has entered a ruthless decline, which is marked by the increasing importance of microprocessors manufactured by Intel; South Korea’s success in the field of memory chips; and the emergence of Taiwan’s foundry business model. Separate semiconductor manufacturing and design. Japan’s current global market share is about 10%.

However, even so, it exaggerates the health of Japanese industry. As the new growth strategy points out, Japan has more semiconductor factories than any other country—in fact, 84 of them are 8 times that of Taiwan and 4 times that of South Korea. The problem is that they are small and old. All of Japan’s market share depends on processes that are ten years or more behind the cutting-edge.

apart from Kioxia, One of the world’s largest flash memory manufacturers, used for data storage in mobile phones, and Sony’s highest market share Image Sensor For digital cameras, Japan mainly produces Not-so-glamorous bargaining chip, Used for specific roles in cars and other devices.

A kind Fire broke out in Naka factory A subsidiary of Renesas Electronics, located in northern Tokyo, caused a global chip shortage, which this year affected Japanese automakers and their EU and US competitors. These global shortages have triggered discussions in various capitals, including Washington and Berlin, about how the government can better protect manufacturers from over-reliance on certain groups of chip manufacturers. Especially Taiwan’s TSMC, It dominates the production of smaller chips.At the same time, Nikkei report In the first five months of 2021, more than 160 Chinese semiconductor companies received a total of US$6.19 billion in funding because Beijing not only wants to meet global demand, but also wants to reduce its dependence on imports.

A bar graph of manufacturer location by chip size shows that Japanese manufacturers produce larger, more advanced chips

The new growth strategy illustrates Japan’s own ambitions to change this situation. The most striking thing is that its discussion of semiconductors constitutes the substance of the chapter “Economic National Security”, showing that Japan’s plan is not to increase production, but to avoid falling into the crosshairs of global tensions, especially the United States. Fierce competition with China. The dominance of future technology.

“The manufacturing of advanced semiconductors is highly concentrated internationally, so we will quickly develop a framework for competition with other countries and promote the establishment of cutting-edge facilities in Japan to create supply security,” the strategy said.Specifically, Tokyo hopes Lure TSMC Establish factories locally and conduct research and development in Japan.

The new strategy also draws on American script, Implying that Japan will make it more difficult for security competitors-most obviously China-to obtain semiconductor technology. According to the report, Japan will “swiftly establish a new framework” to supplement existing export controls and strengthen foreign investment reviews in sensitive technology industries. What this means in practice has not yet been clarified, but an official said that semiconductor technology is under control compared to projects that are more directly regarded as dual-use projects.

The new strategy also has a significant impact on Japan’s semiconductor equipment industry, which is still successful even if its chip manufacturers decline. Companies such as Tokyo Electronics are important equipment suppliers for all major chip manufacturers in the world, while Shin-Etsu Chemical and local rival Sumco are the largest silicon wafer producers.As South Korea discovered when Japan suddenly imposed, many small companies occupy important niche markets Tighter export controls 2019 is about fluorinated polyimide, photoresist and hydrogen fluoride. All three are essential for making chips.

The big question is, will these all work? Foundry costs are high, construction takes time, and so does the knowledge base required to produce cutting-edge technology. Given the high concentration of some semiconductor industries, most analysts believe that it is almost impossible for Japan to regain most of the lost share. However, what has changed from previous decades is that it plans to try.

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