US CHIPS Act: Vice President Kamala Harris Seeks Japanese Partners to Boost Semiconductor Manufacturing

Armed with new legislation aimed at increasing U.S. support for computer chip manufacturing, Vice President Kamala Harris said the administration is looking for new investments and partnerships as she sits down with executives. Japanese technology executives on Wednesday.

The morning meeting on her last day in Tokyo reflects the administration’s focus on boosting semiconductor production and expanding supply chains for critical materials.

The economy’s vulnerability to disruption to the flow of computer chips has been exposed during the pandemic, when shortages have raised costs and stalled the assembly of cars and other products. other.

“Our citizens and citizens trust our products without knowing how dependent they are on semiconductor chips,” Harris said during a meeting at the US ambassador’s residence.

With China investing in its computer chips, the US is trying to boost domestic semiconductor production while also strengthening technological ties with South Korea, Taiwan and Japan.

Harris said the US understands that “no single country can meet the needs of the globe” and that “it is important that we and our allies work together and coordinate in a way that allows us to thrive.” and in a way that allows us to operate at a very practical level.”

The bill signed by President Joe Biden, known as the Science and CHIPS Act, includes $52 billion (approximately Rs 4,25,700) in grants and incentives for semiconductor companies, plus 25% tax credit when they invest in US facilities. There is also about $200 billion (about 16,37,600 crore) available over the next decade to support research programs.

Harris described the legislation as “a discount to future American leadership,” but stressed that “we see Japan playing a very important and pivotal role.”

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

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

Like the United States has done, Japan has set up its own fund to support semiconductor production. Of the $4.3 billion (about Rs 35,200), $3.3 billion (about Rs 27,020) is being provided with subsidies 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 Company, Sony Corporation and Denso.

Companies participating in the meeting with Harris included Tokyo Electron, Nikon, Hitachi High Tech Group, Fujitsu Limited, Micron, 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 concerns that if Japan moves slowly, the fruits of the Biden initiative could be snatched away by another, and more willing, Asian ally, South Korea.

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

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

Atsushi Sunami, a lecturer at the National Institute for Policy Studies, or GRIPS, in Tokyo, notes that limitations for Japan in tackling advanced semiconductor technology can be traced to the view that Japan should not participate in defense studies.

That view stems from Japan’s role in World War II and the prevailing pacifist view, both in Japan and internationally, that arose after its defeat. However, Sunami stressed that a quick rethink is needed and that US moves, in the context of the US-Japan alliance, could be an opportunity for Japan.

“As the hegemonic competition between the United States and China escalates, the way Japan hopes to position itself in the race for international norms and standards, as well as the strategic formation of alliances, will increase,” he said. between countries, as well as between companies,” in a report earlier this year.