Japan, EU to Sign Deal to Strengthen Semiconductor Cooperation

The Yomiuri Shimbun

15:50 JST, July 3, 2023

Japan and the European Union will sign a memorandum to strengthen cooperation over semiconductors, focusing on the establishment of an early warning system that will allow them to share information promptly to avoid supply chain disruptions, according to Japanese government sources.

The aim is to reinforce economic security by expanding supply networks for semiconductors, which are key to competing with China in advanced technology.

The memorandum of understanding will be signed by Economy, Trade and Industry Minister Yasutoshi Nishimura and European Commissioner for Internal Market Thierry Breton in Japan on Tuesday.

The envisaged warning system is intended to allow Japan and the EU to take appropriate action at an early stage, sharing information to mitigate disruptions to supply chains caused by shortages of related materials. The system will be developed jointly.

Semiconductors are indispensable for many products, including personal computers and automobiles. However, Japan relies on imports from Taiwan and other countries and regions to cover much of its domestic demand. Amid the COVID-19 pandemic, chip shortages resulted from disruptions in supply networks and other factors, forcing domestic automakers to cut production.

Given the situation, the Economic Security Promotion Law was enacted in Japan last year. Under the law, semiconductors have been designated as a specified important material for stable domestic supply. The Economy, Trade and Industry Ministry has also decided to provide financial support to domestic semiconductor-related companies.

The memorandum also seeks cooperation in the research and development of next-generation semiconductors, as well as in human resource development in the field. Japan and the EU intend to establish a cooperative framework and build a long-term sustainable relationship.

In Japan, Rapidus Corp. is aiming to produce cutting-edge semiconductors known as the 2-nanometer generation. Such chips are envisaged for use in artificial intelligence and supercomputers.

The memorandum will also include plans for Japan and the EU to work together to create new applications for these chips.

The United States and China are competing for technological supremacy in semiconductors, which are directly linked to competitiveness in both the security and economic fields.

The Japanese government has deepened its coordination with the United States over semiconductors — in May, Tokyo and Washington agreed to jointly formulate a road map for the development of next-generation semiconductors. Japan has also deemed it necessary to strengthen coordination with the EU to improve its international competitiveness.

In April, the EU agreed on the European Chips Act, which seeks measures to support chip production and research and development in the region, with a total of €43 billion (about ¥6.7 trillion) to be invested from the public and private sectors by 2030.