Japan is poised to sharply raise its chip gear spending in an attempt to boost its position in the global semiconductor market, as it tightens exports amid a US-led push to limit China’s technological ambitions.
Japan is expected to spend US$7 billion on fab equipment next year, which would mark an 82 percent jump from this year — the largest in the world — according to data from SEMI, a global association of chipmaking equipment producers.
That compares with a 2 percent increase forecast for China and the total amount would be higher than the combined spending of the Europe and Middle Eastern markets.
Photo: Bloomberg
While Taiwan remains the largest spender — US$24.9 billion expected for next year — on chip fabrication equipment, Japan’s aggressive investment complements a US push to reconfigure global chip supply routes and sources.
Japan has long been a leading producer of equipment and materials necessary to make chips, and is now leveraging its position to woo major chipmakers such as Taiwan Semiconductor Manufacturing Co (台積電) and South Korea’s Samsung Electronics Co.
It is also tightening its grip on crucial equipment. Tokyo last week said that it would expand curbs on shipments of 23 types of cutting-edge chipmaking tools, including extreme ultraviolet mask testers, immersion lithography machines and silicon-wafer cleaners.
Japan’s goals include developing next-generation chips, such as solar panels used to harvest clean energy, that would galvanize its technology industry and economy, said Yeon Wonho, a supply chain analyst at the Korea Institute for International Economic Policy.
“Japan wants a breakthrough with chips,” Yeon said. “It wants to team up with countries like the US for joint research, while attracting manufacturing facilities to its soil.”
China remains a major market for Japan and the government denies its export controls target any particular nation.
However, the latest moves could restrict China’s access to advanced chipmaking technology, and Beijing has said such curbs threaten the stability of the global supply chain.
While Tokyo and Beijing seek to keep their relations stable, Japan has been a major ally in US efforts to keep China from advancing in key technology fronts like quantum computing, wireless networks and artificial intelligence.
The US contributes 39 percent of the total value of the global semiconductor supply chain, while its allies and partners from Japan to Germany account for another 53 percent, according to a 2021 report from the Center for Security and Emerging Technology, a Georgetown University think tank.
China holds about 6 percent, but is quickly developing its abilities across supply chains, it said.
Japan was a leading semiconductor seller until the 1980s, when it began to cede much of its market to Taiwan, South Korea and China. It now specializes heavily in supplies such as wafers — thin slices of material on which microcircuits are built — and other essential chipmaking gear.
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