The US-Japan chip alliance aims to thwart China’s ambitions

Shenzhen Covid curbs

The United States and Japan must join forces to develop the next generation of semiconductors as they seek to crack down on China and its own chip ambitions.

The two longtime allies agreed to establish a new joint research center for high-tech chips during their so-called “two plus two” economic ministerial meeting in Washington, Japanese Trade Minister Koichi Hagiuda said.

US Secretary of State Antony Blinken, US Commerce Secretary Gina Raimondo, Japanese Foreign Minister Yoshimasa Hayashi and Hagiuda also discussed energy and food security, the officials said in a press conference.

Also in AF: SEC adds Alibaba to list of companies facing withdrawal

“As the world’s first and third largest economies, it is critical that we work together to defend the rules-based economic order, in which all countries can participate, compete and prosper,” Blinken said in the opening session.

Blinken said recent global events, including the Covid-19 pandemic and the war in Ukraine, had shown the vulnerability of critical supply chains, while a growing number of countries struggled with debt burdens due to practices of unsustainable and non-transparent loans.

“The coercive and retaliatory economic practices of the People’s Republic of China force countries to make decisions that compromise their security, intellectual property and economic independence,” he said.

Japan’s Hayashi described Russia’s invasion of Ukraine as a serious challenge to the international order and, in an apparent reference to China, although he did not directly name it, referred to attempts “to to use economic influence unfairly and opaquely to achieve … strategic interests and to modify them.” the existing international order”.

Hagiuda said “Japan will move quickly into action” on next-generation semiconductor research and said Washington and Tokyo had agreed to launch a “new R&D organization” to establish a secure source of the vital components .

The research center would be open for other “affiliated” countries to participate, he said.

Taiwan, world leader in chip manufacturing

The two countries did not immediately release additional details of the plan, however The Japanese newspaper Nikkei Shimbun previously said it would be based in Japan later this year to research 2-nanometer semiconductor chips. It will include a prototype production line and should start producing semiconductors in 2025, the paper said.

“As we discussed today, semiconductors are the linchpin of our economic and national security,” Raimondo said, adding that the officials had discussed semiconductor collaboration, “especially with regard to advanced semiconductors.”

Taiwan now makes the vast majority of sub-10-nanometer semiconductors, which are used in products such as smartphones, and there are concerns about the stability of supply should problems arise involving Taiwan and China, which they see the island as a renegade province.

The United States and Japan said in a joint statement that they will work together “to foster supply chain resilience in strategic sectors, including, in particular, semiconductors, batteries and critical minerals.” They promised to “build a strong battery supply chain to lead collaboration between like-minded countries.”

On relations with Russia, Hagiuda said he understood the United States about Japan’s intention to maintain its participation in the Sakhalin-2 oil and gas project despite sanctions against Moscow by Washington, Tokyo and others after the invasion of Ukraine.

Rising tensions over Taiwan

“There are voices calling for withdrawal. But it would mean that our participation goes to a third country and Russia gets huge profits. We explained how maintaining our participation is in line with the sanctions and I think we have gained the understanding of the U.S. “, he said.

Japanese commercial houses Mitsui & Co. and Mitsubishi Corp have a combined 22.5% stake in the project.

Friday’s meeting came at a time of heightened tensions over Taiwan.

Chinese leader Xi Jinping warned in a call with US President Joe Biden on Thursday that he would not play with fire over Taiwan, underscoring Beijing’s concerns about a possible visit to the Chinese-claimed island by the president. of the United States House of Representatives, Nancy Pelosi.

The US House on Thursday passed sweeping legislation to subsidize the nation’s semiconductor industry as it competes with Chinese and other foreign manufacturers.

Reuters with additional editing by Sean O’Meara

Read more:

China says the US Chip Act will hurt the supply chain and global trade

SK Hynix warns of slump in server chip demand driven by recession

The US is advancing a bill with $52 billion in subsidies for chip makers

Sean O’Meara

Sean O’Meara is editor of Asia Financial. He has been a journalist for over 30 years, working on local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

Source link

You May Also Like

About the Author: Chaz Cutler

My name is Chasity. I love to follow the stock market and financial news!