Three Questions to Satoshi Yamada: Unpacking Japan’s Semiconductor Playbook

How have the concepts of "strategic autonomy" and "indispensability" shaped Japanese policies in support of the semiconductor sector?

The concepts of "strategic autonomy" and "strategic indispensability" were developed by the Japanese government in response to addressing geopolitical risks, and today serve as basic concepts of Japan’s economic security policy. These concepts have a strong impact on Japan’s semiconductor policy.

 This can be seen in the ruling Liberal Democratic Party (LDP)’s proposal entitled "Toward the Formulation of an Economic Security Strategy", issued in December 2020, which requested the Japanese government to adopt a comprehensive approach to economic security. It attracted significant attention by introducing these two new concepts.

First, "strategic autonomy" refers to reducing excessive dependence on other countries in areas essential to the daily lives and economic activities of Japanese citizens. Second, "strategic indispensability" involves making Japan’s presence essential in sectors critical to the international economy.
 

From the perspective of "strategic autonomy", to expand domestic production capacity for advanced semiconductors, the Minister of Economy, Trade and Industry has to date approved six projects (with grants totaling up to a maximum of around ¥1.7 trillion, or around US $11 billion) to encourage investment from both Japanese and non-Japanese semiconductor companies. These include two logic semiconductor projects from TSMC and JASM (a consortium of TSMC, Sony Group, and Denso), two DRAMprojects by Micron, and two NANDprojects by Kioxia and Western Digital. 

Companies receiving grants are required to commit to more than a decade of continued production, respond effectively during supply shortages, and make ongoing investments to sustain and strengthen production capacity. This is aimed at reinforcing Japan’s strategic autonomy from an economic security point of view.

Apart from advanced semiconductors, the Japanese government has extended support to general-purpose semiconductors ("conventional semiconductors") and semiconductor-related products ("manufacturing equipment, components, and raw materials"). This reflects the recognition that strategic autonomy cannot be secured solely through advanced semiconductors, but also requires resilience across the entire supply chain.

From the perspective of "strategic indispensability", the Japanese government is also providing support for next-generation semiconductors. For example, Rapidus-which has total government funding up to a maximum of around ¥1.7 trillion, or around US $11 billion, approved between FY 2022 to 2025-was commissioned to engage in R&D related to the manufacturing technology for 2-nanometer logic semiconductors, with the goal of mass production by 2027. Considering that the 2nm node is an advanced technology, this project could be described as enhancing Japan’s "strategic indispensability". Rapidus also received investment from eight major Japanese companies including companies from the automotive industry such as Toyota and from the electronics industry. 

What are Japan's specificities regarding public/private partnerships in the semiconductor sector?

In Japan, semiconductors are considered as a foundational technology supporting Japan’s key industries, such as automotive and electronics. However, during the COVID-19 pandemic, the global supply chain for semiconductors-which had been highly segmented between countries-revealed its vulnerabilities when demand outstripped supply. In addition, due to the increase of geopolitical risks, the importance of economic security has only grown further.

Consider two key chapters from ESPA. Chapter 2 establishes "guiding principles on ensuring stable supply of specified critical products". This is designed to strengthen Japan’s strategic autonomy by designating eleven categories of "specified critical products" (later expanded to twelve), with semiconductors identified as one of them. The Japanese government selects private-sector companies such as the six projects mentioned above, to ensure the stable supply of semiconductors and provides them with the necessary support.

In addition, chapter 4 establishes "guiding principles on promotion of research and development of specified critical technologies". From the perspective of strategic indispensability, the Japanese government has extended support for R&D in next-generation technologies, which includes certain semiconductor-related fields.

The government has also advanced support for next-generation semiconductor related technologies through legislation related to "post-5G", for example, R&D for photonics-electronics convergence technology, and such efforts could be related to the concepts of strategic indispensability. In this way, the concepts of "strategic autonomy" and "strategic indispensability" have come to shape the direction of Japan’s semiconductor support policies.

Notably, the Japanese government has extended grants even to companies with significant foreign ownership, and has also prioritized dialogue with global semiconductor stakeholders. In 2023, then-Prime Minister Kishida convened a roundtable with the heads of major international companies and organizations-including Applied Materials, IBM, Imec, Intel, Micron, Samsung, and TSMC-at which the executives expressed their willingness to support the Japanese semiconductor market. Kishida replied that he would support semiconductor companies investing in Japan.  

Describe the foreign policy dimension of Japan's semiconductor policies, vis-à-vis the US and other international semiconductor players

Japan has actively pursued semiconductor cooperation with the United States and other countries and regions. This is because semiconductor supply chains extend across many countries and regions and the semiconductor industry requires large R&D costs, which makes it difficult for Japan to achieve full supply chain resilience and sustain strategic autonomy alone.

In particular, Japan and the United States have cooperated closely. In May 2022, both governments agreed on the "Basic Principles on Semiconductor Cooperation", to commit to "strengthening and diversifying semiconductor production capacity, promoting workforce development, increasing transparency, coordinating emergency response to semiconductor shortages, and enhancing R&D cooperation". 

In addition, both governments agreed on the basic principles for cooperation being "mutually accepted and complementary". The idea behind this agreement is that Japan and the United States aim to complement each other’s strengths in order to strengthen their respective strategic autonomy and indispensability.

With respect to semiconductor R&D cooperation, the Japanese government established the Leading-edge Semiconductor Technology Center (LSTC) in December 2022 and agreed that LSTC would work with the U.S. National Semiconductor Technology Center (NSTC) as institutional partners. One symbol of this kind of Japan-U.S. cooperation is the collaboration between Rapidus and IBM. 

Rapidus is working to commercialize mass production based on IBM’s 2-nanometer technology. To that end, the company has dispatched a large team of engineers to IBM’s research hub in Albany, New York, to conduct joint R&D on two-nanometer manufacturing technologies. This collaboration has been made possible by the longstanding ties between the Japanese and American semiconductor industries, and the trust built up over many years at the top management level.

On August 6th, 2025, President Trump announced his intention to impose tariffs of "approximately 100 percent" on U.S. imports that contain semiconductors, although he also indicated that companies who commit to "build in the U.S." would be exempt. If tariffs are imposed on these terms, companies like Rapidus, which does not have an U.S. manufacturing facility, could find themselves in a difficult situation. 

Japan also maintains a close cooperative relationship with the European Union (EU). In July 2023, the Japanese government and the EU agreed on the "Memorandum of Cooperation on Semiconductors" that was similar to what Japan and the United States had done.  

This includes agreeing to collaborate on building an "early warning mechanism for the semiconductor supply chain, R&D for semiconductors, advancing skills for the semiconductor industry, use case of semiconductor applications, and transparency of subsidies for the semiconductor sector". 

Japan’s semiconductor industry has long-standing ties with European R&D institutions such as Belgium’s Imec, and collaboration between LSTC and Imec is advancing. In August 2024, Imec established a Tokyo office to strengthen relations not only with academia, industry, and government, but also with Japanese companies, including Rapidus.

The Japanese government has also made agreements to cooperate with countries such as the United Kingdom, the Netherlands, India, and others. In multilateral settings such as the G7, the Japanese government has agreed to establish a "Point of Contact (PoC) Group" on semiconductors, aimed at sharing best practices and promoting collaboration. Regarding Asia, up to now bilateral government agreements have been very limited, with collaboration instead being led by the private sector.

Behind these cooperative endeavors is the fact that Japanese companies hold strong advantages in semiconductor manufacturing equipment and materials, allowing them to form complementary relationships with companies from other countries. The Japanese government also has long-standing expertise in semiconductor policy. Leveraging these strengths, Japan is moving forward to further promote international collaboration. 

Copyright Franck ROBICHON / POOL / AFP
Japanese Prime minister, Shigeru Ishiba, at a Press Conference devoted to US tariffs in Tokyo, April 17th (Ishiba resigned on September 8th).