Japan plans chip production

Japan is investing around NZ$800 million into a new project to develop and make next-generation microchips as the global shortage of semi-conductors sparks concerns around the country’s economic security.

Eight major companies including Sony, SoftBank, Toyota, Mitsubishi and telecoms giant NTT have joined forces for the venture.

Named Rapidus, the new firm, says it aims to mass-produce next-generation semi-conductors by 2027.

The pandemic has fuelled a global shortage of these chips, which are essential components of nearly all modern electronics from smartphones to kitchen appliances and cars.

This has prompted calls for governments and companies to secure chip supplies as geopolitics become increasingly volatile – especially concerning Taiwan, which has a huge chip-producing capacity.

Japan’s industry ministry says each company has invested around NZ$11.4m in Rapidus, with MUFG Bank putting in NZ$4.9m. On top of this, the government will grant NZ$114m to the project.

At an unveiling of the new venture, Rapidus president Atsuyoshi Koike says economic security issues are “very problematic considering the global supply chain” with many chipmakers based in China and Taiwan.

“It seems everyone has come to understand the importance of semi-conductors in recent years and there has also been growing concern about the decline of the Japanese semi-conductor industry”.

US officials believe the world is closer than ever to seeing a conflict over Taiwan, which China considers its own territory. Any move to invade would wreak havoc with global supply chains.

Washington recently introduced new measures to limit China’s access to high-end semi-conductors with military uses, a move that has wiped billions from chip companies’ valuations worldwide.

The German economy ministry also recommended the sale of a chip factory to a Chinese-owned firm should be blocked as it poses a security threat. Last year, Taiwanese chip giant TSMC and Sony said they would tie up on a new plant in Japan.