U.S. and Japan agree to cooperate on semiconductor production

by Jacob Fuller

 

The U.S. and Japan launched a new economic dialogue on Friday aimed at pushing back against China and addressing the worldwide semiconductor shortage.

The two countries agreed to establish a new joint research center for next-generation semiconductors during the so-called economic “two-plus-two” ministerial meeting in Washington, Japanese Trade Minister Koichi Hagiuda said.

U.S. Secretary of State Antony Blinken, U.S. Commerce Secretary Gina Raimondo, Japan’s Foreign Minister Yoshimasa Hayashi, and Hagiuda also discussed energy and food security, the officials said in a press briefing.

“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.

Blinken said recent world events, including COVID-19 and the war in Ukraine, had shown the vulnerability of critical supply chains, while a growing number of countries were struggling with debt burdens due to unsustainable and non-transparent lending practices.

He avoided mentioning how U.S. Democrat-led policies have sparked, fueled, and sustained the supply issues even after most of the economy has reopened since the retreat of the COVID pandemic. Instead, Blinken aimed blame at China and Russia.

“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.

Japan’s Hayashi called Russia’s invasion of Ukraine a serious challenge to the international order and referred to attempts “to use economic influence unfairly and opaquely to realize…strategic interests and to modify the existing international order”.

Semi-conductors

Hagiuda said “Japan will quickly move to action” on next-generation semiconductor research and said Washington and Tokyo had agreed to launch a “new R&D organization” to establish a secure source of the vital components.

The research hub would be open for other “like-minded” countries to participate in, he said.

The two countries did not immediately release additional details of the plan, but Japan’s Nikkei Shimbun newspaper earlier said it would be set up in Japan by the end of this year to research 2-nanometer semiconductor chips. It will include a prototype production line and should begin producing semiconductors by 2025, the newspaper said.

“As we discussed today, semiconductors are the lynchpin of our economic and national security,” said Raimondo, adding that the ministers had said they discussed collaboration on semiconductors, “especially with respect to advanced semiconductors.”

Taiwan now makes a vast majority of semiconductors under 10 nanometers, used in products such as smartphones, and there is concern about the stability of supply should trouble arise involving Taiwan and China, which views the island as a renegade province.

Friday’s meeting came at a time of heightened tensions over Taiwan.

On Thursday, Chinese leader Xi Jinping warned in a call with U.S. President Joe Biden against playing with fire over Taiwan, highlighting Beijing’s concerns about a possible visit to the Chinese-claimed island by U.S. House of Representatives Speaker Nancy Pelosi.

The House passed sweeping legislation on Thursday to subsidize the domestic semiconductor industry as it competes with Chinese and other foreign manufacturers.

Copyright 2022 Thomson/Reuters

Leave a Comment

DONATE NOW