Japan needs to invest billions to revive chip industry: top adviser

Japan must contribute at least $9 billion toward chip development this fiscal year and billions of dollars more after that if it is to revive the industry.

Tetsuro Higashi, Tokyo Electron Ltd. chairman emeritus and the government’s lead adviser on its new semiconductor strategy, said the amount is necessary due to the high cost of chip factories and how far Japan lags behind Taiwan and South Korea in advanced manufacturing.

Higashi, while admitting that it won't be easy to stage a comeback, warned that if Japan misses this opportunity now, there may not be another one.

He added that it takes 10 years or more to build a world-class industry, referring to chip manufacturing in Japan.

Japan is vulnerable to the effects of chip shortages as decades of underinvestment forced its manufacturers to import about two-thirds of their chips.

In a report this month, Japan’s trade ministry said it would treat boosting growth in the industry as a national project, as important as securing food and energy. Part of the plan includes setting up domestic manufacturing bases that could include joint ventures with overseas chip foundries.

TSMC is among the firms that Japan wants to recruit.

TSMC's board has approved setting up a subsidiary near Tokyo to expand materials research with funding from the Japanese government.

To make deals happen, Higashi said that Japan has to give tax breaks, provide subsidies, and facilitate technology sharing.

He noted that there should be more investments in the publicly-funded project in the works near Tokyo, where Japanese firms plan to work with TSMC in developing faster and more energy-efficient 3D chips.