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U.S. and Japan Set To Overtake Taiwan In Semiconductor Technology Development

The Japanese and U.S. governments are close to agreeing to cooperate in the production of chips using 2-nm (nanometer) technology and even more advanced solutions.

Both countries are concerned about their dependence on Taiwanese and other suppliers and are seeking to diversify their sources. They are also working on a mechanism to prevent technology leakage, especially in China.

The current management of Taiwan Semiconductor Manufacturing Company (TSMC) has been favorable to the idea of localizing contract production of semiconductor components in the United States and Japan.

TSMC is currently the leading developer of 2-nanometer technology, while IBM completed a prototype in 2021.

  • The Japanese government has proposed that TSMC builds a plant on the southwestern island of Kyushu, to increase domestic chip production, but the plant would only produce less advanced chips on 10 to 20 nm technology.
  • In the first case, a TSMC facility capable of producing 5nm products should be built in Arizona by 2024.
  • In the second case, a joint venture with Sony and Denso will be set up in Japan within a comparable time frame, which will produce a range of specific products that require lithographic technology from 28 to 12 nm inclusive.

It turns out that by the time they launch, TSMC’s new facilities outside of Taiwan will not be using the most advanced lithography. That said, U.S. and Japanese authorities are interested in narrowing or even closing the technological gap with Taiwan in lithography.

The two countries will join their efforts in this area to jointly master 2nm and more advanced technological processes. At least, the heads of the U.S. and Japanese ministries will negotiate on this issue.

That said, the new Japan-U.S. collaboration focused on advanced development can be seen as the next step after the invitation to TSMC. The U.S. and Japan are also working on a mechanism to prevent technology leakage to China and other countries. Japanese Minister of Economy, Trade, and Industry Koichi Hagiuda is visiting the U.S. to meet with U.S. Secretary of Commerce Gina Raimondo.

  • Interesting is the fact that in 1990 Japan controlled nearly half of the semiconductor market and its turnover at that time did not exceed $38 billion at today’s prices. Now the share of this country has decreased to 10%, but the market turnover has grown at least tenfold.

The Japanese Ministry of Economy, Trade, and Industry attribute Japan’s weakening dominance to several factors, including the U.S.-Japan trade war on memory chips, its inability to implement a horizontally integrated manufacturing model, a delay in digitalization, and other factors.

At this point, it can put forward the theory that the U.S. is trying to secure itself in the field of semiconductors.

The reason for this cooperation was the constant monitoring of Taiwan by China and the threat of reunification with the mainland.

Taiwanese authorities did not comment on the U.S.-Japan semiconductor cooperation.