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How can Japan’s semiconductor industry, which once dominated the world, be revived? From the standpoint of economic security, the domestic production base must be rebuilt.
The government has compiled a draft of a growth strategy action plan and has come up with a policy of focusing on support for strengthening the domestic development and production system for semiconductors.
Semiconductors are called the “rice of industry,” because they are indispensable for industrial products, and their importance is increasing as society becomes more digitized. It is said that the market is expected to expand further with the spread of artificial intelligence (AI) and autonomous vehicles.
Recently, there has been a global shortage of semiconductors due to a recovery in automobile sales and increased demand for computers and game consoles. It is important to ensure stable procurement as quickly as possible.
In the late 1980s, Japanese manufacturers boasted a market share of about 50% of the global semiconductor market, but the figure had fallen to about 10% by 2019.
Japanese companies such as NEC Corp. and Toshiba Corp. were deprived of their competitive edge by Japan-U.S. friction over semiconductors. In addition, the economic slump that followed the bursting of the bubble economy left them without the strength to make bold investments, and they fell behind companies in Taiwan, South Korea and other countries where the public and private sectors invested huge sums of money.
The government should take the opportunity of the latest growth strategy to carefully analyze past failures and rebuild the system.
The United States and Europe have pledged to inject more than ¥5 trillion into their semiconductor industries, and China has pledged more than ¥10 trillion. Now that semiconductors have become international strategic goods, the Japanese government needs to explain to the public how significant a role they play and promote effective investment.
At present, Japan has no factories that are capable of producing the cutting-edge semiconductors for use in smartphones and other devices. On the other hand, Japan has many companies that are among the world’s top producers of materials and manufacturing equipment used to produce semiconductors.
It is realistic for these companies to collaborate with overseas partners, such as in Taiwan and the United States, for joint development and production. It would be desirable for such efforts to lead to the revitalization of Japan’s semiconductor industry.
In late May, the government decided to provide a subsidy of about ¥19 billion to a research and development base that one of the world’s largest contracted semiconductor manufacturers, Taiwan Semiconductor Manufacturing Co. (TSMC), will establish in Ibaraki Prefecture in cooperation with Japanese companies. The government needs to put energy into such support measures.
It is also important to develop Japan’s digital industry, which uses semiconductors. When Japan’s semiconductor industry was booming, Japanese companies were strong in home appliances such as television sets and electronic devices.
It is desirable to vitalize the digital industry as a whole by promoting the use of the 5G high-speed, high-capacity communication standard and robots, and by developing data centers to manage and operate large amounts of information.
— The original Japanese article appeared in The Yomiuri Shimbun on June 8, 2021.
