On Wednesday, financial firm SBI Holdings said it would help Taiwan’s Powerchip Semiconductor Manufacturing Corp establish a factory in Japan as the country looks to revive its chip industry. SBI will set up a company to aid with planning and fundraising, including lobbying for government subsidies, and will help the chipmaker find a location to produce semiconductors for automakers and industrial machinery manufacturers as well as for a research lab to develop more advanced chips, SBI’s CEO, Yoshitaka Kitao, told reporters.
The partnership marks the latest effort by Japan to build up its chip-making capabilities as demand for mobile phones and other electronic devices continues to surge worldwide. Japan has already offered financial assistance to memory chipmakers Kioxia and Western Digital to expand their production facilities and a facility for US chipmaker Micron Technology.
But even as the global shortage has prompted companies to prioritize strengthening their chip manufacturing, many of the world’s leading suppliers remain in Taiwan. The country’s three biggest contract manufacturers, TSMC, United Microelectronics, and Powerchip, account for about 70% of the world’s production capacity. And the lion’s share of TSMC’s factories are located near China, which could become a battleground for future trade wars.
Japan has stepped up its efforts to support the chip business, promoting policies to boost investment and attracting foreign firms to Japan. The country also has been boosting its research and development funding, aiming to build a more substantial base for the industry.
But the growing threat of a trade war has raised concerns that supply shortages will continue to hurt companies globally as investors weigh whether investing in new products makes sense or scaling back on orders, particularly in electronics. This could exacerbate the current slowdown in global GDP growth.
Besides automakers, chip makers that serve smartphone and laptop manufacturers have also been feeling the pain of the supply shortage. For instance, billionaire Mukesh Ambani’s Reliance Industries Ltd had to delay the launch of its Jio Phone Next device last year due to a lack of chips.
The global shortage of semiconductors has raised questions about how prepared India is to make its chips. While India has a National Policy on Electronics, little in the way of a chip ecosystem has developed compared with countries like Taiwan that have nurtured their chipmakers for years.
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