Get serious about chips before it’s too late

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Get serious about chips before it’s too late

Japan is fighting to take back its long-lost supremacy in semiconductor production. The list of Japanese companies in the crusade is peppered with industrial juggernauts such as Toyota, Kioxia, Sony, NTT, Softbank, NEC, Denso and Mitsubishi. Those companies are currently No. 1 in their field or have been at the top in the past.

The dream team dubbed “Rapidus” — the Latin for being “rapid” — kicked off a speedy race to revitalize Japan’s chip industry with the goal of manufacturing cutting-edge semiconductors from 2027. Given their domination of the global chip market in the 1980s, they retain the technology needed to regain chip supremacy. The problem is a lack of manpower, so they decided to bring in top-caliber Japanese engineers working in Taiwan and the United States to produce the coveted 2-nanometer chips. The high-end processing technology required for sophisticated chips is expected to be used by Samsung Electronics, TSMC of Taiwan and Intel by around 2025.

The latest move by Japan represents a strong desire to recover the chip power it lost to Korea three decades ago. In 1992, six Japanese companies were among the global top 10. After repeated failures to challenge Samsung Electronics by regrouping its potential rivals, Japan’s chip industry has now nearly lost its global competitiveness.

However, a seismic shift in the global chip market has offered Japan an opportunity to rebound. The market has long been led by memory chips, but after the advent of the fourth industrial revolution, foundry has emerged as the pillar of the industry due to an increasing demand for the tailored production of chips to meet the varying needs of self-driving cars, smartphones, AI and supercomputers.

When Samsung Electronics dragged its feet on entering the new market due to its focus on NAND flash and memory chips, TSMC came forward. Taiwan devoted its energy to developing the prospective chip sector. It even cut water supplies to farms to divert it to chip factories, despite a severe drought. As America is gearing up to revitalize chip manufacturing within its own territory as it works to compete with China, Japan has rolled up its sleeves to restore its glory of the past.

Where is Korea headed now? A bill aimed at streamlining the complicated approval process on building semiconductor clusters has been gathering dust in the legislature due to strong opposition from the Democratic Party citing “special favors for conglomerates.” In the meantime, the chip industry — Korea’s economic and security pillar — is shaking. The government must persuade the majority party to pass the bill before it’s too late.
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