{"id":6264,"date":"2023-11-02T22:03:05","date_gmt":"2023-11-02T22:03:05","guid":{"rendered":"https:\/\/connectwithfund.com\/markets\/japan-has-fallen-far-behind-in-the-chipmaking-business-its-plotting-a-comeback\/"},"modified":"2023-11-02T22:03:06","modified_gmt":"2023-11-02T22:03:06","slug":"japan-has-fallen-far-behind-in-the-chipmaking-business-its-plotting-a-comeback","status":"publish","type":"post","link":"https:\/\/connectwithfund.com\/?p=6264","title":{"rendered":"Japan Has Fallen Far Behind in the Chipmaking Business. It\u2019s Plotting a Comeback."},"content":{"rendered":"
\n

Does Japan do it better? This burning question of the 1980s may be returning in a new context: luring semiconductor investment. <\/p>\n

Japan has even more ground than the U.S. to regain in the chipmaking game. In 1990, the country produced half the world\u2019s semiconductors. That\u2019s around 10% now. Its most advanced fabs can produce 40 nanometer chips, the Center for Strategic and International Studies reports. State of the art is 3 nm. <\/p>\n

\n

Tokyo, like Washington, has big plans to do better. Its 2022 Economic Security and Promotion Act was a rough equivalent to the U.S. Chips and Science Act. Prime Minister Fumio Kishida\u2019s government aims to triple sales of domestically produced chips by 2030 to 115 trillion yen ($762 billion). It\u2019s already committed a trillion yen or so in subsidies. <\/p>\n

Japan does seem to have taken an early lead in the new semiconductor race. Global giant
\n Taiwan Semiconductor Manufacturing
\n (ticker: TSM) is ahead of schedule on a new \u201cfab\u201d in the southwestern city of Kumamoto and planning a second one. Production at its megaproject outside Phoenix was lately delayed by a year till 2025. CEO Mark Liu cited an \u201cinsufficient number of skilled workers.\u201d <\/p>\n

There\u2019s an apples-to-oranges element in this comparison. Japan is looking to hit a solid single, manufacturing relatively thick microchips to supply its electronics and auto industries today. The U.S. is swinging for the fences: churning out the ultrathin chips of tomorrow in Arizona. <\/p>\n

Still, Japan may be more on the right track. Taiwan Semi is financing its Kumamoto fab jointly with two core customers,
\n Sony Group
\n (6758.Japan) and auto parts powerhouse
\n Denso
\n (6902.Japan). The government is kicking in close to Y500 billion. <\/p>\n

In Phoenix, Taiwan Semi has to build first and qualify for Chips Act funding later. In theory that would bar it from building anything in China over the next decade, though a waiver is expected. \u201cThe U.S. approach is more ambitious, but Japan\u2019s more focused strategy is more likely to succeed,\u201d says Mario Morales, who heads semiconductor research at consultant IDC. <\/p>\n

Japan has maintained global leadership at key points in the chip supply chain, particularly equipment and chemicals. Other links, like testing and packaging, can be sourced relatively nearby. \u201cAll that lives in Asia,\u201d Morales says. \u201cThe Chips Act doesn\u2019t address the supply chain.\u201d <\/p>\n

A centralized Japanese government can smooth over roadblocks that have become endemic to building anything big and complicated in the multijurisdictional, litigious U.S.\u2014from providing a community playground to fighting environmental lawsuits. \u201cWe need to revisit 1970s environmental laws to make them more streamlined and predictable,\u201d says Sujai Shivakumar, head of CSIS\u2019 Renewing American Innovation Project. <\/p>\n

Japan, after decades of deflation, is also cheaper on key inputs like construction and labor, adds Christopher Miller, a Tufts Fletcher School professor who studies the chip sector. <\/p>\n

Japan Inc. does have its own long-ball ambitions in semiconductors. A dozen top names are teaming with U.S.-domiciled
\n IBM
\n (IBM) and the government on a new venture called Rapidus, which promises to produce 2-nanometer chips by 2027. Shivakumar is skeptical. \u201cThis looks like a bit of a Hail Mary pass, trying to leapfrog several generations of technology,\u201d he says. <\/p>\n

The same might be said of both countries\u2019 overarching goal of a semiconductor industry buffered from Taiwan\u2019s unique vulnerabilities. \u201cYou can bet that the most advanced stuff will still be made in Taiwan,\u201d Morales says. <\/p>\n

It\u2019s still worth trying.<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Does Japan do it better? This burning question of the 1980s may be returning in a new context: luring semiconductor investment. Japan has even more ground than the U.S. to regain in the chipmaking game. In 1990, the country produced half the world\u2019s semiconductors. That\u2019s around 10% now. Its most advanced fabs can produce 40 nanometer chips, the Center for Strategic and International Studies reports. State of the art is 3 nm. Tokyo, like Washington, has big plans to do better. Its 2022 Economic Security and Promotion Act was a rough equivalent to the U.S. Chips and Science Act. Prime<\/p>\n","protected":false},"author":1,"featured_media":6265,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[],"class_list":["post-6264","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets"],"yoast_head":"\nJapan Has Fallen Far Behind in the Chipmaking Business. It\u2019s Plotting a Comeback. | ConnectWithFund<\/title>\n<meta name=\"description\" content=\"Does Japan do it better? This burning question of the 1980s may be returning in a new context: luring semiconductor investment. 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