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Japan to lure semiconductor makers with financial incentives

Semiconductor technology is now “as important as food or energy”

Japan is seeking to attract overseas semiconductor companies through financial incentives as it looks to secure future chip supplies amid a global shortage.

"Japan will swiftly match efforts by other countries to attract cutting-edge chip-making facilities so it can build a secure supply chain at home," the government revealed in a draft growth strategy which is set to be approved at the end of the month, as reported by Nikkei Asia.

As Japan imports over 60% of its semiconductors from overseas, mainly Taiwan and China, there are concerns that tense global relationships could affect supply chains around the world in the future.

"Semiconductors are now as important as food or energy," said an unnamed official at Japan's Ministry of Economy, Trade, and Industry (METI).

A Cabinet Office official added that Japan is looking to aim for cooperation with foreign companies instead of solely relying on efforts by Japanese players.

Furthermore, it emerged that some members in the government and the ruling Liberal Democratic Party are seeking to create a new supersized fund worth tens of billions of dollars, the details of which are expected to be debated soon.

An official pointed out that as Japan has no Silicon Valley, it may be challenging to attract high-end chip-making facilities which could result in the country only being able to "secure mid-end supplies".

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Japan's METI is set to take the lead on pursuing overseas players for potential partnerships, and the country wants to coordinate with countries and regions it shares values with to move part of their supply chains to Japan as part of national security measures.

Earlier this week, Japan approved a $338 million (£238 million) semiconductor research project that will see Taiwan Semiconductor Manufacturing Company (TSMC) develop new chip tech in the country. Over 20 Japanese companies are going to take part in the project, and the Japanese government will pay half of the $338 million investment.

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