(Bloomberg) -- Japan will seek to “drive growth” in the nation's chip industry, trying to breathe new life into a sector with massive capacity, but trouble turning out cutting-edge products.
The Ministry of Economy, Trade and Industry said in a report Friday that it would treat semiconductor industry growth as a “national project” -- as important as securing food and energy. The government will support the establishment of manufacturing bases in Japan including through joint ventures with overseas chip foundries, METI said.
The push comes amid a global chip shortage that has weighed on manufacturing across a range of industries and threatens Japan's auto production. China, South Korea and the U.S. are all seeking to bolster their domestic chip industries.
Japan's share of global semiconductor sales dwindled to just 10% in 2019, down from 50% in 1988. The country still has 84 chip factories, the most in the world, but they're not producing enough high-end products. As a result, Japan now has to import 64% of its semiconductors.
Japan Floats Plan to Reboot an Aging Chip Industry: Supply Lines
The ministry report follows a draft growth strategy from the Cabinet Secretariat issued earlier this week, which assessed the country's semiconductor manufacturing base as outdated. Japan was the world's biggest maker of microchips in the 1980s, but has since lost out to the likes of Taiwan and South Korea.
METI will seek a “drastic revamp” of existing chip factories deemed strategically important in supporting the global supply chain. It will also strengthen development of chips required for post-5G systems and supporting green innovation.
The government will identify areas especially important to the nation and consider “special treatment” beyond policies taken for regular industries, according to the report.
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