Japan Builds Semiconductor Subsidy Information Network with US and EU to Prevent Oversupply

Information Sharing on Subsidy Scale and Regional Supply-Demand Outlook
for Semiconductor Supply Chain Development to 'Check China'

Japan and the European Union (EU) are expected to establish a trilateral information network involving the US, Japan, and the EU starting next month by sharing information related to their respective semiconductor support measures. This move is interpreted as a strategy by the US, Japan, and the EU?who are building semiconductor supply chains while countering China?to prevent oversupply of semiconductors and create an efficient supply chain through information exchange.

On the 29th, Nihon Keizai Shimbun reported that early next month, Yasushi Nishimura, Japan’s Minister of Economy, Trade and Industry, is expected to meet with Thierry Breton, the EU Commissioner for Internal Market who oversees semiconductor policy, to reach an agreement on information sharing. If Japan and the EU agree, they will share information such as the conditions and reasons for providing subsidies to companies, the amounts, and the resulting regional supply and demand forecasts.

The US is already sharing related information with Japan and the EU. If Japan and the EU reach an agreement in this context, the three countries/regions will form a semiconductor information-sharing network. This is seen as a measure to stabilize the supply chain through Western countries’ solidarity, even if trade is suspended due to deteriorating relations with China, as part of semiconductor supply chain countermeasures with China in mind.

In particular, the semiconductor market experiences immediate price drops when oversupply occurs, severely damaging the profitability of related semiconductor companies. Recently, advanced semiconductors used in artificial intelligence (AI) have faced supply shortages due to demand exceeding supply. In this situation, Nihon Keizai explained that the US, Japan, and the EU could adjust the types and quantities of semiconductors produced domestically to regulate supply.

It is also expected that the US, Japan, and the EU will refer to each other’s subsidy payment strategies. Currently, Japan plans to provide large-scale subsidies to companies like Taiwan’s TSMC, which has decided to build semiconductor factories in Japan. The EU is offering subsidies to attract semiconductor companies but remains more cautious compared to Japan, while the US has secured a budget through the Semiconductor Support Act but has not yet made payments.

By sharing information in this way, it is expected that overlapping subsidy payments can be prevented, allowing for more efficient use of funds. Global semiconductor companies such as Intel and TSMC are considering investments worldwide and negotiating with various governments, and it is anticipated that the US, Japan, and EU governments will be able to formulate subsidy negotiation strategies considering the entire supply chain.

Professor Tsuyoshi Kawase of Chuo University evaluated this by saying, "The approach of sharing subsidy payment situations among governments is a new development even globally."

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