Can chip firm lead to cutting-edge products being produced domestically?

A public-private project has begun to domestically produce cutting-edge semiconductors. The hope is that the revitalization of the chip industry, which is becoming increasingly important due to the digitization of society, will be realized this time.

Eight major companies, including Toyota Motor Corp., NTT Corp. and the Sony Group Corp., have established the next-generation semiconductor company Rapidus Corp. The companies have invested about ¥7.3 billion in the new company, and the government is also providing financial support.

Semiconductors are used in all kinds of industrial products such as smartphones and automobiles. They are also necessary for military equipment and are an important material in terms of national security.

The Japanese semiconductor industry used to dominate the global market, with at its peak a share of about 50%. The nation fell behind others, however, when its competitiveness declined due to Japan-U.S. friction over chips and became unable to compete with South Korea and Taiwan, which have invested heavily in the industry.

The current situation has Japan relying heavily on imports of semiconductors, but the system of free trade has been shaken by the U.S.-China confrontation and the crisis caused by the Russian invasion of Ukraine. It is reasonable for the public and private sectors to work together toward domestic production in order secure cutting-edge semiconductors.

This is not the first time that the government has taken the lead in revitalizing the semiconductor industry, however. Past efforts that failed are notable, as seen in the subsequent bankruptcy of Elpida Memory, Inc., a company formed through the merger of the semiconductor divisions of electronics manufacturers.

The factors that led to this failure must be examined and strategies must be carefully rethought.

With semiconductors, the finer the circuit line width, the higher the processing capacity. Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, is said to be capable of producing semiconductors with line widths of 3 nanometers (1 nanometer is 1 billionth of a meter). Japanese companies in their current state can manufacture semiconductors with circuit lines of only about 40 nanometers.

By 2027, the newly established Japanese company reportedly aims to mass-produce semiconductors with circuits of 2 nanometers, a production technology that has yet to be established in the world. There are many challenges to achieving this goal.

Cooperation with other countries is essential. The government plans to establish a new research and development center in Japan, which will also collaborate with IBM Corp. of the United States and U.S. research institutes. It is hoped that overseas knowledge will be made use of to acquire manufacturing technology.

Securing human resources is also an urgent task. Not a few engineers have reportedly gone overseas due to the decline of the Japanese semiconductor industry. Every effort must be made to gather human resources and speed up their development through enhanced training.

On the financial side, the cost from R&D to factory construction is expected to be about ¥5 trillion. The government will at first subsidize ¥70 billion and plans to contribute additional funding. The government should explain in detail the significance of the project.

Promoting the strengthening of industries that use semiconductors is essential. It is important to increase competitiveness in areas such as autonomous driving, robotics and home appliances that make use of artificial intelligence, and revitalize industry as a whole.

(From The Yomiuri Shimbun, Dec. 5, 2022)