Kamala Harris seeks chipmaking partners at meetings in Japan

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TOKYO — Armed with a new law that bolsters U.S. support for computer chip manufacturing, Vice President Kamala Harris said the administration is seeking new investments and partnerships as she sits down with Japanese tech leaders Wednesday.

The morning meeting of its last full day in Tokyo reflects the administration’s focus on boosting semiconductor manufacturing and expanding the supply chain for critical materials.

The economy’s vulnerability to disruptions in the flow of computer chips was revealed during the pandemic, when a shortage helped drive up costs and stall the assembly of cars and other products.

“Citizens and people in our countries depend on products sometimes without even knowing how much these products depend on semiconductor chips,” Harris said during the meeting at the US ambassador’s residence.

As China invests in its own computer chips, the United States is trying to increase its domestic semiconductor manufacturing while working to cement its technology relationships with South Korea, Taiwan and Japan.

Harris said the United States understands that “no country can meet global demand” and “it’s important that we and our allies partner and coordinate in a way that allows us to grow and in a way that allows us to operate at a very practical level”. level.”

Legislation signed by President Joe Biden, known as the CHIPS and Science Act, includes $52 billion in grants and incentives for semiconductor companies, plus a 25% tax credit when they invest in US facilities. There is also about $200 billion over the next decade to support research programs.

Harris described the legislation as “a down payment on future American leadership,” but stressed that “we view Japan as playing a very important and critical role.”

Jimmy Goodrich, vice president of global policy at the Semiconductor Industry Association, “there is a great opportunity and significant space for future investment” involving Japan.

Although Japan was once a world leader in computer chip manufacturing, its status has eroded over the past two decades and the country is increasingly worried about falling behind.

Just as the United States did, Japan set up its own fund to support semiconductor production. Of $4.3 billion, $3.3 billion is provided in grants for a new factory in Kumamoto, in the southwest of the country.

The facility is expected to begin production by the end of 2024, and it is a partnership between Taiwan Semiconductor Manufacturing Co. TSM,
+0.03%

2330,
-2.01%,
Sony SONY Group,
-1.21%

6758,
-1.61%
and Denso 6902,
-1.60%.

Companies participating in the meeting with Harris include Tokyo Electron 8035,
-2.35%,
Nikon 7731,
-1.79%,
Hitachi High Tech Group 6501,
-1.36%,
Fujitsu Limited 6702,
+0.32%,
Micron Japan MU,
+3.48%
and others.

When Biden was in Japan earlier this year, the two countries agreed to work together on computer chips, including through a joint group focused on developing more powerful technologies.

There are fears that if Japan is slow to act, the fruits of the Biden initiative will likely be picked up by another, more ready Asian ally, South Korea.

Yasutoshi Nishimura, Japan’s Minister of Economy, Trade and Industry, has repeatedly stressed the US-Japan alliance on semiconductors, as well as on energy and other issues.

In recent meetings with US Secretary of Commerce Gina Raimondo and US Ambassador Rahm Emanuel, Nishimura promised to set up a semiconductor chip research facility in Japan this year and expand the partnership on semiconductors with other allies, including Europe and Taiwan.

Atsushi Sunami, who teaches at the National Graduate Institute for Policy Studies, or GRIPS, in Tokyo, noted that Japan’s drawbacks to tackling advanced semiconductor technology may be rooted in the idea that Japan does not should not get involved in defense studies.

This view stems from Japan’s role in World War II and the widespread pacifist views, both in Japan and in international circles, that emerged after its defeat. But Sunami stressed that a quick overhaul was in order and that the US measures, given the US-Japan alliance, could be an opportunity for Japan.

“As US-China hegemonic competition intensifies, how Japan hopes to position itself in the jockey for international standards and rule-making, and the strategic formation of alliances between nations, as well as between businesses, will be critically important,” he said. in a report earlier this year.

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