Japan’s Strategic Play in the Global Semiconductor Arena: Reviving its Legacy

Pioneering a New Era for Japan’s Semiconductor Industry

In December 2018, Kikukawa Hito, the Director of the Information Industry Division at Japan’s Ministry of Economy, Trade, and Industry (METI), along with two colleagues, Tanaka Nobuhiko, Director of the Equipment Industry Strategy Room, and Kadoya Yuichiro, Assistant Director, found themselves deliberating over a critical question: “Can Japan’s semiconductor industry continue on its current path?” This query stemmed from their rich background in Japan’s Extreme Ultraviolet Lithography (EUV) research, witnessing Japan’s decline from holding half of the global semiconductor market to a mere 10%. Despite retaining a competitive edge in semiconductor manufacturing equipment and materials, Japan lagged in advanced EUV equipment development, with Dutch company ASML leading the charge.

The CAPEX Initiative: Japan’s Bold Move

Triggered by a strong sense of urgency towards the offshoring of semiconductor production and potential foreign acquisitions of Japanese manufacturers, Kikukawa proposed a significant subsidy scheme to attract top-tier semiconductor manufacturers to Japan. This plan, dubbed the “CAPEX Plan,” aimed to court industry giants such as…