Japan vies for ‘last chance’ as major global chip producer

TOKYO (AP) – Japan is investing nearly half a billion dollars to boost semiconductor development and production in a “last chance” attempt to maintain its position as a major player on the global tech stage, the government said on Friday.

The new company, Rapidus, which means “fast” in Latin, will work on developing next-generation or “post-5G” semiconductors, according to the Ministry of Economy, Trade and Industry.

These advanced chips enable smart devices and smart cities with high-speed sensors and transmission. The components have to be extremely thin – a fraction of a hair’s breadth.

The 70 billion yen ($490 million) effort will involve working closely with Japan’s key ally, the US, to bring together “the best and brightest” from both nations, the ministry said in a statement.

Japan has long prided itself on being a technological powerhouse, including in chip production, but the ministry on Friday conceded that Japan was ten years behind global competition including the US, South Korea, Taiwan and some European nations.

Now is “Japan’s last chance” to remain a player in the industry, it said.

Recent lockdowns in China related to the coronavirus pandemic have brought to light Japan’s dependence on other nations for computer chips and other key components. Analysts say the uncertain future of US-China relations, which could jeopardize supplies from China, is adding to growing concerns.

But the transition will take time. Japan is targeting mass production of the chips by the late 2020s or within a few years, the ministry said.

Automaker Toyota Motor Corp., electronics maker Sony Group Corp. and NEC Corp. and SoftBank Corp., Nippon Telegraph and Telephone Corp., Denso Corp. and Kioxia part.

Each company invests 1 billion yen ($7 million) in addition to subsidies from the Japanese government. An eighth company, MUFG Bank, is investing 300 million yen ($2 million) in Rapidus.

Next-generation chips are expected to be crucial for artificial intelligence and automated driving systems. Investments in such technologies will lead to jobs and growth, the Japanese government said.


Yuri Kageyama is on Twitter at https://twitter.com/yurikageyama

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