U.S. and Japan Forge Alliance to Tackle China’s Semiconductor Supremacy

Upcoming Summit to Confirm Cooperation
Plans to Collaborate with G7 and Others

The United States and Japan are set to bolster their semiconductor alliance against China, expanding the front to include general-purpose semiconductors.

According to Yomiuri Shimbun, on the 2nd, the United States and Japan reached an agreement to reinforce their cooperation in establishing a semiconductor supply chain aimed at reducing reliance on specific countries for semiconductor procurement. This initiative will be formalized at the bilateral summit scheduled for the 10th. They plan to include the improvement of the semiconductor supply chain in conjunction with allied countries in the joint statement.

President Joe Biden of the United States and Prime Minister Fumio Kishida of Japan are expected to cooperate with the Group of Seven (G7) and other allied nations at next week’s summit to reduce reliance on Chinese general-purpose semiconductors. The Japanese government is considering providing subsidies to domestic companies participating in this policy to support this effort. The supply chain reinforcement plan details will likely be discussed by U.S. Commerce Secretary Gina Raimondo and Japan’s Minister of Economy, Trade, and Industry, Ken Saito.

The U.S. government is particularly concerned about China enhancing its general-purpose semiconductor manufacturing capabilities to expand its global market share. According to the U.S. research firm Rhodium Group, as of March last year, China accounted for about 30% of the global market share for general-purpose semiconductors used in automobiles and home appliances. China plans to accelerate factory construction, and its manufacturing capabilities are expected to rise to around 46% in ten years.

The backdrop to this cooperation is a growing sense of crisis that the risk of being exposed to economic coercion, where trade restrictions are used to pressure other countries, as reliance on China deepens. The Yomiuri Shimbun analyzed that the United States and Japan have revealed their intention to cooperate and counteract economic coercion.