Japan and US join hands for their new Semiconductors Strategy

On Friday, the United States and Japan began a new high-level economic conversation to confront China and the disruption brought on by Russia's invasion of Ukraine. According to Japanese Trade…

By Nivedita Bangari

July 31, 2022

3 min read

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On Friday, the United States and Japan began a new high-level economic conversation to confront China and the disruption brought on by Russia’s invasion of Ukraine. According to Japanese Trade Minister Koichi Hagiuda, during the so-called economic “two-plus-two” ministerial meeting in Washington, the two longtime allies decided to build a new joint research centre for next-generation semiconductors.

Energy and food security were other topics that U.S. Secretary of State Antony Blinken, Secretary of Commerce Gina Raimondo, Foreign Minister of Japan Yoshimasa Hayashi, and Hagiuda discussed, according to the officials.

“As the world’s first- and third-largest economies, it is critical that we work together to defend the rules-based economic order, one in which all countries can participate, compete and prosper,” Blinken told the opening session.

A increasing number of nations are experiencing debt pressures as a result of unsustainable and opaque lending methods, according to Blinken, who cited recent global events such as the COVID-19 pandemic and the war in Ukraine as examples.

“The coercive and retaliatory economic practices of the People’s Republic of China force countries into choices that compromise their security, their intellectual property, their economic independence,” he said.

The two nations did not immediately provide more information about the plan, although the Japanese newspaper Nikkei Shimbun had earlier reported that a facility would be established in Japan by the end of this year to perform research on 2-nanometer semiconductor chips. According to the newspaper, it will have a prototype production line and start making semiconductors by 2025.

Japan’s Hayashi called Russia’s invasion of Ukraine a serious challenge to the international order and – in an apparent reference to China, though he did not name it directly – referred to attempts “to use economic influence unfairly and opaquely to realize … strategic interests and to modify the existing international order.”

There are worries about the stability of supply should conflict emerge between Taiwan and China, which sees the island as a renegade province, as Taiwan now produces the great majority of semiconductors under 10 nanometers, which are utilised in goods like smart phones.

The United States and Japan said in a joint statement they would work together “to foster supply chain resilience in strategic sectors, including, in particular, semiconductors, batteries, and critical minerals.” They vowed to “build a strong battery supply chain to lead collaboration between like-minded countries.”

Regarding relations with Russia, Hagiuda claimed he was able to persuade the United States that despite sanctions imposed on Moscow as a result of the invasion of the Ukraine, Tokyo intends to maintain its stake in the Sakhalin-2 oil and gas project.