China has urged Japan to avoid supporting the US's latest curbs on China's semiconductor industry. Japan, a key part of the semiconductor supply chain, announced export restrictions on 23 types of semiconductor manufacturing equipment, which was seen as an attempt to impose restrictions on semiconductor cooperation with China. This move has been met with strong dissatisfaction from China, which expressed concern over Japan's export controls on semiconductor manufacturing equipment and urged Japan to avoid complicating mutual trust and bilateral ties.
In response to the latest developments, the Japanese government aims to triple the sales of domestic semiconductor manufacturers to JPY 15 trillion by 2030. The goal of the strategy, which is to be updated later this year, is to address supply chain vulnerabilities of semiconductors in the wake of the coronavirus pandemic, Russia's invasion of Ukraine, and China's growing economic influence. To achieve this goal, about JPY 11 trillion needs to be invested by the public and private sectors, including for research and development, over the next 10 years.
The industry ministry has already taken steps to ensure chip-making inside Japan by providing hefty subsidies to companies such as Rapidus, a new company formed last year through investments from Toyota Motor and Sony Group, and Taiwan Semiconductor Manufacturing Co (2330.TW). These efforts aim to strengthen Japan's economic security by producing microchips domestically to address global supply chain snarls.
In the latest development in the ongoing saga between China and Japan, China has urged Japan to avoid supporting the US's latest curbs on China's semiconductor industry. On April 2, Japan announced export restrictions on 23 types of semiconductor manufacturing equipment, which were seen as an attempt to impose restrictions on semiconductor cooperation with China. These restrictions have been met with strong dissatisfaction from China, which expressed concern over Japan's export controls on semiconductor manufacturing equipment. The Chinese government has urged Japan to take an objective stance and defend a stable and smooth global industrial chain, a free and open global trade order, as well as common interests of both sides.
Despite these tensions, the Japanese government aims to triple the sales of domestic semiconductor manufacturers to JPY 15 trillion by 2030. This comes as part of efforts to address supply chain vulnerabilities of semiconductors in the wake of the coronavirus pandemic and China's growing economic influence. Investing about JPY 11 trillion needs to be made by the public and private sectors, including for research and development, over the next decade to achieve this goal. Japan has already taken steps to ensure chip-making inside its own country by providing hefty subsidies to companies such as Rapidus, a new company formed last year through investments from Toyota Motor and Sony Group, and Taiwan Semiconductor Manufacturing Co.
It is worth noting that the US has been trying to rally some key nations in the semiconductor supply chain, including South Korea, Japan, and the Netherlands, around its measures aimed at cutting China off from obtaining or manufacturing advanced chips. Japan's Friday announcement came after the Netherlands, home to one of the most critical semiconductor companies ASML, announced last month export limitations on “advanced” chip manufacturing equipment. While these countries have put some export restrictions in place, they are still trying to maintain trade ties with China. The Chinese government has warned against supporting US curbs on China's semiconductor industry and has urged countries to defend a stable and smooth global industrial chain and common interests.
