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Why it issues: US-China relations have continued to deteriorate over the previous two years as each nations want to construct a stronger home provide chain for superior chips. Japan has the distinctive alternative to supercharge its semiconductor trade, so it needs to forge a deeper collaboration with the US.
Last yr, we discovered that Japan needs to reignite its once-dominant semiconductor trade, which has gone from producing 50 p.c of the world’s chips in 1990 to lower than 10 p.c immediately. Japan has 84 chip manufacturing crops however a lot of them use getting older course of applied sciences and are in want of pricy retooling.
The Japanese authorities has made it a high precedence to incetivize non-public investments on this space. Like others, its efforts are born of fears {that a} fragile provide chain that is principally concentrated round China, Taiwan, and South East Asia is a risk to its nationwide safety. As a end result, Japanese regulators are engaged on subsidizing the development of latest factories, giving tax breaks, and growing a brand new framework to encourage expertise sharing.
According to a Nikkei report, Japan can also be in search of a more in-depth partnership with the US in constructing a extra resilient provide chain for superior chips. This week, Japan’s Minister of Economy, Trade and Industry Koichi Hagiuda met with Commerce Secretary Gina Raimondo to debate the cooperation effort, which can revolve round chiplets and course of applied sciences past 2 nm. Intel plans to get there by the top of 2024, whereas Samsung and TSMC are aiming to start out mass manufacturing of two nm chips in 2025.
As famous by the Japanese publication, Japan has lots to supply to the partnership, save for ASML’s superior lithography machines. This consists of numerous indispensable suppliers of requisite supplies and instruments wanted within the chipmaking course of.
For occasion, Sumco Corp. and Disco Corp. specialise in silicon wafers, whereas Lasertec Corp. is the world’s solely provider of apparatus for verifying excessive ultraviolet lithography (EUV) masks and stencils for superior chip designs. Ushio Inc. makes highly effective, ultra-precise mild sources which might be wanted to examine chip instruments and the ensuing chips for tiny defects.
Few have heard of JSR Corp., Tokyo Ohka Kogyo Co., or Shin-Etsu Chemical Co., however they make important elements for chip and show manufacturing akin to hydrogen fluoride, fluorinated polymide, and photoresists. Japanese corporations provide round 50 p.c of the world’s chipmaking supplies and round 30 p.c of the mandatory manufacturing tools.
The thought is that Japan can use this energy in direction of constructing a powerful provide chain with the US, which has extra chipmakers in addition to an in depth portfolio of mental property associated to semiconductors. It’s additionally value noting {that a} consortium of principally American corporations are engaged on an necessary piece of the puzzle for the way forward for semiconductors — a standardized interconnect expertise for chiplet designs known as UCIe.
Meanwhile, Japanese corporations like Canon and Tokyo Electron are engaged on new chip manufacturing applied sciences on the National Institute of Advanced Industrial Science and Technology alongside American giants like IBM.
Even corporations like TSMC see worth in a stronger Japanese semiconductor ecosystem, so it is constructing a 28 nm fab on the southwestern island of Kyushu. Sony is anticipated to be one of many clients of the brand new manufacturing unit. An official announcement on the US-Japan chips alliance may very well be made within the coming weeks.
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