[The Editors' Verdict] The Dream Team of Japanese Semiconductors and the Future of K Semiconductors

Revival of Japan's Semiconductor Industry: More Important to Examine Long-Term Strategic Implications Than Alarmist Crisis Fears
Essential to Identify Our Weaknesses and Provide Selective Support

The Revival of Japanese Semiconductors. While there may not be much profit to be gained from underestimating the opponent, there is certainly some doubt. Is it possible for Japan, which is 10 years behind South Korea and Taiwan, to close that gap within just 5 years? The ‘Rapidus’ project, funded by eight Japanese companies including Toyota and Sony with 1 billion yen each, plus 70 billion yen in government support, aims to develop advanced semiconductors under 2 nanometers (nm, one billionth of a meter) by 2027. If successful, Japan would emerge as a competitor on par with South Korea, home to Samsung Electronics, and Taiwan, home to TSMC.

The Japanese government’s 70 billion yen support amounts to about 664 billion Korean won. TSMC’s capital expenditure this year is 47 trillion won. The semiconductor budget in Japan’s supplementary budget this year is 12 trillion won, while the U.S. recently announced 74 trillion won in support funds for ‘production facility attraction.’ Although legislative amendments are required, the South Korean government has committed to investing 340 trillion won over five years through its ‘Semiconductor Superpower Achievement Strategy.’ China is also pouring tens of billions of dollars into the semiconductor industry but has yet to be recognized as approaching the level of South Korea or Taiwan.

Therefore, automatically attaching criticism like “What is South Korea doing?” to news from Japan is somewhat mechanical and defeatist. Rather than making a fuss as if a crisis has occurred, it is more important to calmly examine Japan’s long-term strategy. Japan excels in materials, parts, and sensors but has weaknesses in manufacturing technology. The global semiconductor division of labor system has provided a foundation for not only Japan but all semiconductor players to focus on their own areas. However, the U.S.-China hegemonic competition and the geopolitical risks involving South Korea and Taiwan are shaking this framework. Japan is striving to quickly acquire its lagging manufacturing capabilities by attracting TSMC factories or establishing a company named ‘Rapidus,’ which means ‘fast.’

At this point, merely insisting that Samsung Electronics find a way not to be overtaken by Rapidus is somewhat hollow advice. What Japan’s moves suggest to us is a much more concrete strategy: how to address our weaknesses in system semiconductors, advanced equipment, and workforce development to build our own semiconductor ecosystem. Although not perfect, the passage of the K Chips Act (Special Act on Semiconductor Support) in the National Assembly will be a starting point that encompasses all these challenges. While the opposition party argues that the act favors large corporations, a flexible approach is required on matters directly related to national security. Establishing complementary measures that selectively identify and support weaknesses in South Korea’s semiconductor industry could also be an alternative.

The first word that came to mind upon hearing about Japan’s semiconductor industry reconstruction efforts was d?j? vu. The Japanese government’s announcement phrase, “10 years behind South Korea and Taiwan. The last chance to catch up,” intensified that feeling. Doesn’t it closely resemble the words and policies South Korean government and companies used decades ago when saying, “Let’s catch up with Japan”? Whether we praise the foresight of our business leaders who decisively invested early in semiconductors as a national security asset or simply attribute it to luck, we have every right to hold positive pride. And on that foundation, K Semiconductors are about to open Season 2. As in Season 1, the protagonists are the companies. The National Assembly just needs to refrain from hindering, even if it cannot help.

This content was produced with the assistance of AI translation services.