How Japan and South Korea want to get out of the chip crisis



The new semiconductor mercantilism of the three great economic powers of Europe, the United States of America and China is putting great pressure on the high-tech giants of East Asia, Japan and South Korea. The United States, China and the EU are currently trying to set up chip factories within their economic borders with billions of euros. In doing so, they want to become more self-reliant in a key part of the digital world, as the current chip crisis is causing them huge problems.

Today, Japan and South Korea are also developing their own funding programs and survival strategies. Economic planners in Tokyo and Seoul fear losing their current strong position in the global supply chain in the Three Giants race and the technology war between the United States and China.

The Japanese government is expected to unveil a new growth strategy in June in which the revitalization of the local chip industry, which once dominated the world alongside the US, will play a leading role. Kazumi Nishikawa, the officer in charge of Ministry of Economy, Trade and Industry (Meti), gives the reason: “We fear that all sectors of the chip industry will be outside of Japan if we do nothing now. “

The exact details of the plan are still unknown, but the direction of the plan is not. Japan has already lost its strong position as a production site. The production of memory chips is dominated by the South Korean groups Samsung Electronics and SK Hynix, the production of chips by TSMC in Taiwan. Only Kioxia, the former semiconductor division of technology giant Toshiba, holds the position for memory chips and Renesas for component chips.

After all, manufacturers of production and test systems as well as manufacturers of specialty materials and chemicals for the chip industry have so far managed to maintain their often dominant position in the supply chain. Chip know-how is still important in universities and technology groups. But the government is concerned that sooner or later these functions will also move to where chips are also produced in large quantities.

In its aid program, however, the Japanese government does not rely on mapping the entire supply chain in its own country, says Nishikawa. “We need to improve capacity, but with other countries. For this, the government wants to concentrate its limited resources on areas where the industry is strong today and which will experience a boom with the networking of daily life and factories.

These include chips for networked devices and machines, cars, artificial intelligence, sensors, environmental technologies and, as another field, materials science. Because no country can provide the variety and quantity required, explains Nishikawa. “You need a global supply chain. “

The Japanese government is therefore already negotiating joint initiatives with the United States and competing for what is currently the largest chip contractor, TSMC from Taiwan. And this is already a first success: TSMC will set up a new research center in Japan which will focus on new packaging materials and processes. South Korea, meanwhile, is trying to use its groups’ dominant position in memory chips to become the leading manufacturer of LSIs and computer chips. In May, the government presented its “K-Semiconductor Strategy,” which aims to boost investment of more than € 370 billion in the chip industry by 2030 with subsidies and tax breaks for research and the development as well as the construction of factories.



At the same time, the government and companies are trying to use reliable partners and suppliers in the United States to try to re-emphasize the production of chips in the United States, as well as that of batteries and cars. South Korean President Moon Jae-in presented US President Joe Biden with an inaugural state gift from Korea AG during a summit meeting in May. The four Korean companies Samsung Electronics, LG Energy Solution, SK Innovation and Hyundai Motor have pledged to invest a total of $ 39.4 billion in the production of semiconductors, electric cars and batteries in the United States.


Japan has always tried everything possible with electronics – and often the impossible. Every Thursday, our author Martin Kölling reports here on the latest trends from Tokyo.

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The success of the Japanese and Korean plans is by no means guaranteed. Japan and Korea still try to maintain their role as neutral suppliers to all nations. The two countries are therefore avoiding too much contempt for their main trading partner, China. But their strategies suggest that in the technology war between the United States and China, companies and countries will have to make more and more decisions about who to bond more closely. Europe could benefit by fostering alliances with the two East Asian technology exporters.


(baccalaureate)

Disclaimer: This article is generated from the feed and is not edited by our team.



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