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Japan, Once the World Leader in Microchips, Now Races to Catch Up

  • August 08, 2022

That will make it difficult, and potentially very expensive, for Japan to revive the industry, analysts said. The semiconductor study group run by Mr. Seki, the Japanese lawmaker, has estimated that success will require an investment of at least $78 billion.

“What they’re trying to do is reverse more than 20 years of underinvestment,” said Damian Thong, the head of Japan equity research at the Macquarie Group.

Whether or not the undertaking is economically viable, Japan believes it has no choice but to try.

The first steps are already taking place in Kyushu, in southern Japan, which is known as Silicon Island because of its position as the hub of the country’s once-thriving semiconductor industry.

In June, METI announced that it would provide $3.5 billion in subsidies for the construction of an $8.6 billion chip foundry in Kumamoto, a prefecture on the island’s west coast.

The factory, the first to receive government support under the new initiative, is a joint investment between TSMC, which makes more than 90 percent of the world’s most advanced chips, and two major Japanese companies, Sony and Denso, which supplies parts to Toyota.

It will be the most advanced production facility in Japan, albeit still behind the world’s leading plants. Production is set to begin by the end of 2024.

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