As part of a $500 million push by their host government, some of Japan's leading tech companies are joining together. According to The Wall Street Journal, Sony, SoftBank, and Toyota are working with chipmakers to develop new chips by the end of the decade. There is a wide variety of chips needed to power the advanced computers, artificial intelligence systems, and self-driving cars that are expected to mature in the near future. The effort marks Japan's clearest move yet to maintain relevance in the global chip race, which has been dominated by the U.S., China, and Taiwan.
Japan's economy minister framed the country's investment in the tech as a national security concern.
According to The Journal, Nishimura said that the fight for control of technology between the U.S. and China intensified.
The initiative gives companies like Toyota and Sony the chance to be more involved in their own supply chains. It means that those companies could potentially protect themselves from global supply chain shocks that could threaten their production output. Due to the chip shortages, Toyota reduced its production plan by half a million vehicles. It is still difficult to purchase a new Sony Playstation 5 two years after the release of the game.
Japan's half a billion dollar investment may stand out domestically, but it still pales in comparison to other recent investment in chips in the U.S. The CHIPS Act was passed earlier this year by congress members who put aside their partisan squabbling to pass it. A new fund meant to encourage innovation is included in the legislation.
The private companies made their own spending commitments. Taiwanese chip making giant TSMC said it would spend $12 billion to build a new plant in Arizona. GlobalWafers, a Taiwanese chipmaker, said it would spend $5 billion to build a new plant in Texas. According to reports, construction on that plant started in September. It would look like peanuts compared to the $200 billion the company wants to spend over the next two decades on chip making plants in Texas.
Several European countries and China have announced plans to ramp up their own chip manufacturing. Each of those countries and specific private industry chip manufacturers are reacting to a glaring supply log jam made painfully obvious during the Pandemic. Tech firms throughout the industry are still picking up the pieces from the shortage which exposed the industry's reliance on a few manufacturers located in Taiwan and China.
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