Updated February 22nd, 2024 at 18:30 IST

Taiwanese chipmakers expand operations in Japan amid US-China chip battle

This surge comes amidst changing dynamics and priorities in the global chip industry, driven by the United States' initiatives to curb China's advancements.

Reported by: Business Desk
Semiconductors | Image:Unsplash
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Semiconductors manufacturing: Japanese efforts to revitalise its semiconductor industry receive a boost as an increasing number of Taiwanese chip companies expand their operations in the country. This expansion is not only in support of a new TSMC plant but also reflects optimism about Japan's semiconductor sector prospects.

This surge comes amidst changing dynamics and priorities in the global chip industry, driven by the United States' initiatives to curb China's advancements in cutting-edge semiconductors and strengthen alliances with its allies.

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Alchip Technologies, a fabless chipmaker specialising in customised chips, exemplifies the trend of decoupling from China. While previously most of its research and development engineers were based in China, the company has begun relocating roles overseas, with many moving to Japan. Alchip Technologies is now actively hiring in Japan, North America, and Taiwan, emphasising its focus on capitalising on opportunities in the Japanese ASIC market.

Several Taiwanese chip firms have established or expanded their presence in Japan over the past two years, with companies like eMemory Technology opening offices and hiring local talent. The increased presence of Taiwanese firms in Japan is attributed to the ease of decision-making due to a weak yen and the growing business opportunities in the region.

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Japan, once a dominant player in the semiconductor market, has seen its global market share decline significantly over the years due to various factors. However, recognising the strategic importance of semiconductors for economic security, Japan has allocated substantial resources to rebuild its chip manufacturing sector. TSMC's investment in Japan, along with plans for additional fabs, underscores Japan's resurgence in semiconductor manufacturing.

The proactive support from the Japanese government, characterised by substantial subsidies and minimal political interference, is seen as a key driver of progress in the country's semiconductor industry. In addition to TSMC, other Taiwanese companies like Global Unichip Corp and Materials Analysis Technology are expanding their presence in Japan, drawn by the engineering talent and favourable business environment.

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Despite the positive outlook, challenges remain, including the need to address the decline in the number of workers in Japan's chip-related businesses. Efforts by the government and universities to encourage students to pursue careers in the semiconductor field aim to mitigate this challenge and ensure the long-term growth of Japan's semiconductor industry.

(With Reuters inputs)

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Published February 22nd, 2024 at 09:20 IST