My Vision No.68
2023.11The Success or Failure of Its Semiconductor Strategy
Will Determine the Future of the Nation
How can Japan ensure its economic security in relation to semiconductors?
How can the nation gain an advantageous position in the ongoing restructuring of supply chains?
In this issue of My Vision, we discuss the semiconductor strategy that Japan should adopt.

About This Issue
Design and Development Capabilities Are the Wellsprings of Semiconductor Competitiveness- Rather Than Relying on Large Corporations, We Must Cultivate Broad-Based Private-Sector Capability
Yasufumi Kanemaru
Chairperson, NIRA/ Chairman and President, Group CEO, Future Corporation

Against the background of conflict between the U.S. and China and concerns over the China-Taiwan
situation, Japan’s national strategy for semiconductors, a crucial commodity, is coming under discussion.
What direction should Japan's semiconductor strategy take from the perspective of economic security?
How can Japan gain an advantageous position amid the restructuring of supply chains?
In this issue of My Vision, leading experts, including policymakers, a business leader, a journalist, and a
researcher offer their opinions on these questions.
Keywords…Direction for national strategy, semiconductor design and development capabilities, broad-based privatesector capability

Expert Opinions
The Success or Failure of Its Semiconductor Strategy Will Determine the Future of the Nation
What direction should Japan’s semiconductor strategy take from the perspective of economic security?
Against the background of ongoing reorganization of supply chains, how can Japan gain an advantageous
position in this area?

Enhance “Strategic Autonomy” and “Strategic
Indispensability” in Collaboration with AllyCountries

Collaborate with Other Countries to Strengthen the
Manufacturing Ecosystem, Aiming Toward NextGeneration Domestic Production

Keitaro Ohno

Hisashi Kanazashi

Member of the House of Representatives

Director, IT Industry Division, Commerce andInformation Policy Bureau, Ministry of Economy,
Trade and Industry

Keywords…Enhancement of manufacturing capability,
friendshoring, game change

Keywords…Attraction of TSMC to Japan, Rapidus,
responsibility for the manufacturing ecosystem

Improve Design and Development Capabilities for
Semiconductor Chips to Maintain CompetitivenessBusinesses Play the Leading Role: Take Advantage of
the Opportunities Offered by Geopolitical Friction
and Periods of Technological Transition

Kimio Fujii

Yasuhiko Ota

President and Executive Officer, Nihon Synopsys G.K. Columnist, Nikkei Inc.
Keywords…Semiconductor design and development
capabilities, development and deployment of humanresources, profitable business model

Avoiding Fragmentation and Advancing
Semiconductor Technology Through International
Collaboration
Hitoshi Wakabayashi
Professor, Integrated Green-niX+ Research Unit,
Institute of Innovative Research, Tokyo Institute ofTechnology

Keywords…Security and free trade, corporate initiative,
development of intellectual property (IP)Interview period：August,2023-October,2023
Interviewer: Sosuke Suzuki (Research Coordinator &Researcher, NIRA), Yoshie Udagawa (Research
Coordinator & Researcher, NIRA), Yuki Takenaka(Research Coordinator & Researcher, NIRA)

Keywords…Key industries with shared global
importance, knowledge accumulation, chiplets
Editor: Reiko Kanda, Maiko Sakaki and Tatsuya Yamaji. This is a translation of a paper originally published in Japanese.
NIRA bears full responsibility for the translation presented here.
Copyright Ⓒ 2023 by Nippon Institute for Research Advancement

1My Vision No.68
2023.11
About This Issue

Design and Development Capabilities Are the Wellspringsof Semiconductor Competitiveness-Rather Than Relying on Large Corporations, We Must Cultivate Broad-BasedPrivate-Sector Capability
When thinking about national security, it goes without
saying that semiconductors, in particular logic semiconductors
such as central processing units (CPUs) and graphics processing
units (GPUs), will be extremely important for the future world.
High-performance semiconductors are essential to the solution ofproblems in every field, including artificial intelligence (AI), electricvehicles (EV), measures in response to global warming, and theYasufumi Kanemaru

military. While I have high hopes for Japan's semiconductor

Chairperson, NIRA /Chairman and President, Group
CEO, Future Corporation

strategy, I also have concerns. If the direction of the national
strategy is misguided, the private-sector projects that follow will
not produce results.

In the field of computers in particular, Japan's national strategy and projects conducted bylarge corporations have continued to fail. Japanese companies had a strong global presence at thedawn of the CPU in the 1970s, but lost their place when 16-bit CPUs took center stage. Major
Japanese manufacturers followed IBM's lead and concentrated their business resources on
mainframe computers, and the government encouraged them to do so. However, the market expanded
explosively with the advent of the personal computer. As the market expanded, CPU performance also
evolved rapidly, leading to today's smartphones. Both the companies involved and the government
misjudged these new technological innovations and market changes, and failed to reap the fruits of
their investments.
In the 1980s, a national project for a “fifth-generation computer” was launched under theleadership of the Ministry of International Trade and Industry (now the Ministry of Economy, Tradeand Industry), but this too ended in failure. If a semiconductor strategy is pursued without examining
and reflecting on why national and corporate strategies have been misguided, the same mistakes will
be repeated.

The Position Japan Should Aim Towards in the Semiconductor Arena: More Than
Simply Attracting New Factories
The semiconductor field is extremely diverse, ranging from design and development tomaterials, manufacturing equipment, front-end processing, back-end processing, and further toapplications. What areas is Japan targeting and how? The Japanese government and Japanesecompanies tend to focus on mass production at large factories. Because there is a clear expectationthat demand for semiconductors will continue to increase into the future, they perhaps believe thatbuilding an advanced plant and making it a strategic production base with the help of the Taiwan
Editor: Reiko Kanda, Maiko Sakaki and Tatsuya Yamaji. This is a translation of a paper originally published in Japanese.
NIRA bears full responsibility for the translation presented here.
Copyright Ⓒ 2023 by Nippon Institute for Research Advancement

2My Vision No.68
2023.11
Semiconductor Manufacturing Company (TSMC), which the government has attracted to Kumamoto
Prefecture, will lead directly to industrial development and improved national security.
How can we formulate a consistent overarching design for the future of Japan’s
semiconductor industry that takes into consideration projections of national strategy and changes inthe semiconductor market?
Rivalry between the U.S. and China is intensifying in the semiconductor field. With the goalof maintaining military superiority, the U.S. Department of Defense is trying to keep advanced
semiconductor manufacturing capabilities at home and in allied countries, and to prevent
technologies that might threaten its own security from flowing out of the country. At the same time,from a business perspective, the U.S. and China will remain important trading partners, and the U.S.
reluctance to release advanced semiconductor technology may spur China to develop its own
technologies. Japan must take these circumstances into consideration in a comprehensive mannerand align its national strategy for industry and national security with private-sector strategies. If new
investment is focused solely on manufacturing plants, problems in international supply chains willremain, and even if it is possible to realize the manufacture of advanced semiconductors, it will benecessary to compete with TSMC to win customers. The idea that building advanced factories willlead to industrial prosperity and national security seems rather vague as a national strategy.
Keitaro Ohno, a member of the House of Representatives, tells us that Japan should become
a maker of products that are indispensable to other countries, allowing it to secure a strategic position.
Hisashi Kanazashi, Director of the IT Industry Division of the Ministry of Economy, Tradeand Industry, also stresses the importance of contributing to the world in the fields of memory,
materials, and manufacturing equipment, fields in which Japan possesses strengths.
These are valid points, but they are not the only things that need to be focused on. The
influential players in the semiconductor field today are companies with strong design anddevelopment capabilities, in particular fabless semiconductor manufacturers(*) able to realize
competitiveness in their end products depending on the strengths of their semiconductors. AI
semiconductors from NVIDIA are indispensable for the development of generative AI models, and thetechnologies possessed by Arm, a British semiconductor design giant that excels in power efficiency,
are reshaping the market structure of the CPU industry. Companies including Google, Amazon andApple have also commenced in-house development (these companies can be considered fablesssemiconductor manufacturers that cater only to internal needs). As Kimio Fujii, president andexecutive officer of Synopsys Japan, G.K., tells us, Japan cannot remain competitive without
semiconductor design and development capabilities.

During a Time of Technological Transition, It Is “New Blood” That Will Move the
National Semiconductor Strategy Forward
As Yasuhiko Ota, a columnist of Nikkei Inc., points out, semiconductors have reached atechnological turning point. With the emergence of “chiplet” technology, which sees chips being createdby combining blocks for different functions, and “RISC-V,” an open-source CPU design,
semiconductors are also moving from an era of “concentration” to one of “decentralization.” Professor
Hitoshi Wakabayashi of the Tokyo Institute of Technology indicates that collaboration among

Editor: Reiko Kanda, Maiko Sakaki and Tatsuya Yamaji. This is a translation of a paper originally published in Japanese.
NIRA bears full responsibility for the translation presented here.
Copyright Ⓒ 2023 by Nippon Institute for Research Advancement

3My Vision No.68
2023.11
numerous companies is required to create a single product.
Under these circumstances, how can we foster and strengthen fabless semiconductor
manufacturers with strong design and development capabilities?
Most important of all is human resources, but education in the field of semiconductors has
already disappeared from Japanese universities, and companies lack the requisite expertise. The
Japanese government is spending a huge amount of money to attract semiconductor factories to Japan,
but it should be expending the same amount of money and resources on acquiring human resources.
Recruiting talented engineers from overseas by offering attractive compensation packages is anefficient and reliable strategy, and spinning out teams with semiconductor design capabilities fromlarge companies to form start-ups is also an option. It will be important to increase the amount of new
blood in the field, not only in the area of cutting-edge semiconductor design and development, but also
in companies that use these semiconductors in their products and services.
Above all, the government should develop a national strategy that organically links thedisparate efforts of government agencies, universities, and the private sector. This includes training
engineers to prevent the decline of legacy semiconductor manufacturing capability and promoting theconsolidation of companies. It will also be essential to provide budgetary support for new entrants tothe market, who are always the main drivers of innovation, rather than simply relying exclusively on
existing large companies. The success of Japan's semiconductor strategy depends on whether it will
be able to create a broad base of private-sector capacity.
(*) This refers to manufacturers which specialize in functions such as product design and marketing,but which do not have their own factories or production facilities, outsourcing all production toexternal manufacturing companies.

Mr. Kanemaru is the Chairperson of the Nippon Institute for Research Advancement (NIRA)and the Chairman and President,Group CEO of Future Corporation. He has served in a number of public positions, including as a member of the Council for
Regulatory Reform, the Growth Strategy Council - Investing for the Future, and the Growth Strategy Council.

Editor: Reiko Kanda, Maiko Sakaki and Tatsuya Yamaji. This is a translation of a paper originally published in Japanese.
NIRA bears full responsibility for the translation presented here.
Copyright Ⓒ 2023 by Nippon Institute for Research Advancement

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2023.11
Expert Opinions

Enhance “Strategic Autonomy” and “Strategic Indispensability”
in Collaboration with Ally Countries
The pandemic and the war in Ukraine were chief among a
number of factors that caused a worldwide shortage in semiconductor
supply. In Japan, there were backlogs in numerous areas such as theautomotive and home appliance industries. Larger trends include theglobal movement towards carbon neutrality and the fully-fledged spreadof AI. Investment in the field of semiconductors is vigorous in light of thesetrends. Particularly noteworthy is the deterioration of the international
order against the backdrop of conflict between the U.S. and China. Theinternational supply chain for semiconductors has emerged as a major
Keitaro Ohno
economic security issue. Japan is, naturally, working to enhance theMember of the House of
manufacturing capabilities of its own companies, but is also
Representatives“friendshoring,” the restructuring of the supply chain through cooperation
among ally countries, in order to stabilize the international order, all thewhile bearing in mind the possibility of contingencies in relation to Taiwan, among other factors. It has
also begun to make efforts to attract manufacturing bases to the country.
In the development and production of cutting-edge semiconductors, it will be important to deepen
cooperation with ally countries and ensure “strategic autonomy” to avoid excessive dependence on specificcountries, in addition to realizing “strategic indispensability,” i.e., making Japan an indispensable presence
for other countries.
For the time being, the basis of Japan’s efforts will be to provide the necessary support to domestic
industry utilizing the existing framework. The provision of support for R&D and investment in
manufacturing facilities is of course a given, and the creation of institutional measures to prevent theoutflow of Japan's cutting-edge technology to other countries has already been instituted. In addition, due
to the complexity of technological trends and industrial structure, the government has begun to create an“economic intelligence” infrastructure that can accurately analyze Japan's strengths and weaknesses.
With regard to next-generation architecture, it would be desirable for Japan to focus on creating“game-changing” technologies while maintaining an accurate grasp of changing needs. Japan should also
work actively to resolve its “valley of death” problem” (i.e., its inability to reach the stage ofcommercialization and implementation despite world-class research and development), which has been a
consistent weakness for the nation. It will also be important to create mechanisms to encourage strategic
efforts toward international standardization. One example is NTT's “IOWN Concept,” which seeks to
reduce power consumption through photoelectric fusion. With the world's demand for electric power rapidly
increasing, this project has great potential. In order to respond to uncertainties in the future, it will benecessary to prepare and implement multiple options in parallel.
Japan has earned a high degree of trust from other countries as a country that adheres to anddefends free trade and international rules. It is important for Japan to help maintain and strengthen theinternational order while leveraging that legacy, and to play a role in shaping international rules for the
new era with the agreement of the international community.
Dr. Ohno is a member of Japan’s House of Representatives. Following a career with Fujitsu Limited and Fujitsu Laboratories,
he was first elected to the House of Representatives at the 46th election in 2012. As of the time of writing, he is serving his
fourth term. Dr. Ohno has served in posts including Parliamentary Vice-Minister of Defense and State Minister of the Cabinet
Office. He also serves as Chief Secretary of the Liberal Democratic Party's Headquarters for the Promotion of Economic
Security. In addition to his involvement in the LDP's “Overall Vision for Japan’s Future Economic Security,” he has been an
active voice in the field of economic security, formulating a series of proposals that contribute to economic security, including
the promotion of system design for security clearance and cyber security, active involvement in the formation of internationalrules such as trade control regimes, and the establishment of analytical methods for understanding supply chains. Dr. Ohnoholds a Ph.D. in Information Science and Technology from The University of Tokyo.

Editor: Reiko Kanda, Maiko Sakaki and Tatsuya Yamaji. This is a translation of a paper originally published in Japanese.
NIRA bears full responsibility for the translation presented here.
Copyright Ⓒ 2023 by Nippon Institute for Research Advancement

5My Vision No.68
2023.11
Expert Opinions

Collaborate with Other Countries to Strengthen the Manufacturing
Ecosystem, Aiming Toward Next-Generation Domestic Production
The semiconductor supply chain suffered considerable damage
as a result of the Covid-19 pandemic and the war in Ukraine. Two years
ago, amid the increasing geopolitical instability of the U.S.-China
confrontation, action began to be taken in the area of semiconductor
policy due to the need for economic security. Since then, steady progresshas been made in moving forward with the policies which needed to be
adopted, seeing the government work to attract Taiwan's TSMC tosituate a plant in Kumamoto Prefecture in order to enhance domestic
semiconductor supply, and the establishment of Rapidus as a
production base that will boost Japan’s future competitiveness. With
Hisashi Kanazashi
geopolitical tensions increasing, it will be necessary for Japan and
Director, IT Industry Division,
Taiwan to complement each other without Japan becoming too reliant
Commerce and Information
on Taiwanese semiconductors, and for Japan to bear in mind potential
Policy Bureau, Ministry ofcontingencies.
Economy, Trade and Industry
No single country can take on the burden of the entire
semiconductor manufacturing process. The key to economic security is
to have a smoothly functioning manufacturing ecosystem, including the supply of human resources,
realized in cooperation with other countries. Japan should contribute to the world in the areas of memory,
materials, and manufacturing equipment, where it is strong, and rely on other countries in areas in which
it is less capable, in this way fulfilling its absolute responsibility in the formation of the supply chain. For
example, other countries require a stable supply of wafers and substrates, and this is an area in which
Japan boasts a large market share. In order to ensure the technological evolution of these products, it willbe essential for the government to continue to provide the necessary support to small-scale businesses thathave difficulty in raising funds.
Japan's current semiconductor production capability is in the 40 nanometer range (a nanometeris one billionth of a meter). When the TSMC Kumamoto plant is operational, it will be possible tomanufacture semiconductors in the range of 12 to 28 nanometers in Japan; these are in high demand inindustries including the automotive and electronic products industries. In addition, TSMC's second plantis expected to mass-produce higher-performance 6-nanometer semiconductors. TSMC’s expansion into
Japan is a joint venture with Sony and Denso, an approach that TSMC itself is in favor of. The company
is building a plant in Germany using a similar joint venture approach. Further, while cutting-edge 2- and3-nanometer semiconductors have not been in demand in Japanese industry up to the present, they willbe essential in the 2030s. It is hoped that Rapidus will set its sights on this market and promote thedomestic development of cutting-edge semiconductors.
Possessing the ability to supply next-generation semiconductors will also be important from theperspective of Japan’s security. We are also now witnessing a change in the structure of semiconductors,
which continue to miniaturize (see note), giving Japan an opportunity to enter the market. Additionally, it
will be important to be able to design and manufacture with end-users in mind, as U.S. companies do. The
status of supply and demand in the area of semiconductors is changing rapidly, making it difficult to judge
whether current policies are adequate to the situation. Nevertheless, Japan must also enhance its
initiatives in the areas of analog and power semiconductors.
(Note) Transistor structure is undergoing an innovation from FinFET to GAAFET in order to realize the further
miniaturization of semiconductors.
After joining the Ministry of International Trade and Industry (now the Ministry of Economy, Trade and Industry), Mr.
Kanazashi worked in the Industrial Revitalization Division and the Cabinet Secretariat’s Japan Economic Revitalization
Bureau, before being stationed at the JETRO Los Angeles office for three years from 2016. From 2019, he served as Directorof the Industry Creation Policy Division, promoting the implementation of the Open Innovation Taxation System in the field.
He has held his current position since July 2022. Mr. Kanazashi is responsible for coordinating the Ministry of Economy,
Trade and Industry's “Semiconductor and Digital Industry Strategy,” and leading the efforts to attract TSMC to construct aplant in Japan and establish Rapidus Corporation, which aims to become a Japanese semiconductor foundry, and LSTC,
which will support the development of the country's semiconductor technology.
Editor: Reiko Kanda, Maiko Sakaki and Tatsuya Yamaji. This is a translation of a paper originally published in Japanese.
NIRA bears full responsibility for the translation presented here.
Copyright Ⓒ 2023 by Nippon Institute for Research Advancement

6My Vision No.68
2023.11
Expert Opinions

Improve Design and Development Capabilities for Semiconductor
Chips to Maintain CompetitivenessAs geopolitical and supply chain risks increase, the Japanese
government has moved to attract TSMC to Kumamoto Prefecture andsupport the establishment of Rapidus, a Japanese company targeting
fabrication of cutting-edge semiconductor chips. However, thesemiconductor industry is built on a global ecosystem. Some increase in
fabrication capability in Japan does not necessarily mean elimination ofgeopolitical risks. This could be one form of revitalization, but not
sufficient from the perspective of economic security. Japan is strong in
Kimio Fujii
the areas of semiconductor materials and manufacturing equipment, but
President and Executive
these are only part of the semiconductor supply chain.
Officer, Nihon Synopsys G.K.
The real strategy that should be adopted to boost Japan's
industrial competitiveness is to increase semiconductor chip design and development capabilities.
Otherwise, Japan's semiconductor industry will not be able to thrive. Furthermore, it will lose out incompetition with the rest of the world in all electronics-related industries. A clear example is theautomotive industry, which is one of Japan's strengths. Up to the present, the key to competitiveness has
been the performance of the engine, but as electrification and autonomous driving progress, the only thingthat will make the difference between winning and losing in the market is the performance of thesemiconductor chips, besides the storage batteries. If we continue to develop only software that utilizes
general-purpose chips rather than designing customized chips, as we are doing at present, we will not beable to take the lead in the global market. Tesla is already designing its own semiconductor chips. This is
not only the story in the automotive field. GAFAM companies have also started designing their own
customized chips to survive in the market. They have realized it is essential for them to design thesemiconductor chips that form the foundation of their systems and software products, to differentiate themfrom competitors. Without the ability to design and develop semiconductor chips, Japan will lose its
competitiveness. This is true for industries in general.
Japan's past failures in the semiconductor business have led to a decline in investment and a
downward spiral over more than 30 years. The government has been shortsighted, and management has
only considered immediate profitability without working toward the realization of a long-term vision. As aresult, the number of human resources involved in the semiconductor industry has declined sharply, andthere is an overwhelming shortage of semiconductor chip designers. We must create opportunities for theprovision of chip design education, but this alone will not be enough. Unless a business model is created inwhich educated human resources continue to generate profits within companies, the bitter past will comeback again. The key to the success or failure of Rapidus, which fabricates cutting-edge semiconductor chips,
will be also whether or not it is able to establish its own business model. One idea is that the government
takes measures to link Rapidus with the automotive and other industries that apply semiconductor chips.
Rapidus would foster new customers, and the automotive industry would be encouraged to develop its own
customized chips using Rapidus fabrication. The government should actively encourage the semiconductor
industry and the industries that apply semiconductors to revitalize themselves through synergistic effects.
Mr. Fujii is the President and Regional Vice President of Sales of Nihon Synopsys G.K., the Japanese subsidiary of California’s
Synopsys Inc. Among its offerings, Nihon Synopsys G.K. provides tools to support semiconductor design automation (EDA)
and pre-designed semiconductor circuits (IP). In 1981, Mr. Fujii saw the potential of semiconductors, a new field at the time,and joined the semiconductor development company Texas Instruments Japan, Ltd. He supported the rapidly developing
semiconductor industry, including involvement in the evolution of logic semiconductor design methods. Mr. Fujii was
appointed to his current position in 2000, following terms as President and Representative Director of the semiconductor
design and development companies Cirrus Logic Japan Inc. and Cygnus Solutions Japan.
Editor: Reiko Kanda, Maiko Sakaki and Tatsuya Yamaji. This is a translation of a paper originally published in Japanese.
NIRA bears full responsibility for the translation presented here.
Copyright Ⓒ 2023 by Nippon Institute for Research Advancement

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My Vision No.68
2023.11
Expert Opinions

Businesses Play the Leading Role: Take Advantage of the Opportunities
Offered by Geopolitical Friction and Periods of Technological Transition
The semiconductor industry is often thought of as being caught in a
conflict between national security and free trade, but the two cannot beviewed as opposites. While trade in advanced technology is a matter ofnational security, and as such is increasingly controlled by the state, generalpurpose semiconductors are key products in numerous industries and tradein them should be maintained on a free-trade basis. Looking at the actionsof the government alone, the U.S. appears to be monolithic, but inside
Washington, the government and businesses are engaged in a fierce daily
struggle. The interests of the government, which seeks to expand regulations,
Yasuhiko Ota
and the interests of companies, which want to secure a place in the Chinese
Columnist, Nikkei Inc.
market, sometimes tend in opposite directions. The question is how
companies can operate strategically within these boundaries. Tectonic shifts
in geopolitics can be seen as an opportunity for companies to create a place for themselves.
Businesses play the leading role in the economy. Rather than being swept away by the maincurrents of the time and withering away, they must create their own vision for survival in an international
community marked by friction. This will depend on the degree to which companies can secure their
independence. They will also need to possess sufficient tenacity to enable them to deal shrewdly with China.
If they maintain their own proprietary technologies, companies will have the power to negotiate not onlywith China, but also with the United States. Corporate consultants who emphasize economic security are
guiding companies to “protect” themselves by conforming to U.S. export regulations. However, this type of
merely subservient protection will not help a company grow.
In order for Japan's semiconductor industry to regain its competitiveness, it must establish
engineering unique to Japanese companies that cannot be imitated by companies from other countries.
Looking at examples of companies that are doing precisely this, the U.K.-based Arm, which provides basic
technologies for semiconductor logic design, and the U.S.-based Synopsys, which provides platforms forsemiconductor design, are key players in the current semiconductor value chain. Japanese companies
should also aim to develop intellectual property (IP) rights that will be essential to next-generation
semiconductor manufacturing. Irrespective of its superiority in manufacturing, Japan’s semiconductor
industry will not be revived on this basis alone. In order to produce innovators who will change the way of
thinking regarding added value in this area, it will be necessary for Japanese companies to provide a broad
range of opportunities for human resources from nations in Southeast Asia and other emerging nations.
Fortunately, semiconductor technology is now at a major turning point. This is a phase thatnecessitates new technological systems capable of attaining the pinnacle of miniaturization and energy
conservation. “Chiplets,” which realize advanced functions by layering and combining chips, represent an
area in which Japan can demonstrate its strength. If Japan was able to adopt an offensive strategy, taking
the lead in standardizing this technology and licensing it out, it would be a significant element in thenation’s revival. The conditions for this will be that companies become hungry for the accumulation ofknowledge and expertise on their manufacturing frontlines and that the government formulates anindustrial policy that outlines a major national strategy.
Mr. Ota has reported on international affairs including diplomacy, trade, and innovation for the Nihon Keizai Shimbun formany years. His book 2030 handoutai no chiseigaku (“The Geopolitics of Semiconductors in 2030,”), published in 2021 by
Nikkei BP, vividly depicts the conflict between nations over semiconductors, which are increasing in value as strategic assets.
After joining Nikkei Inc. in 1985, he studied at the Massachusetts Institute of Technology (MIT) in the U.S., and reported for
Nikkei’s U.S., Germany, and Singapore offices. He was an editorial writer from 2004 to 2021. Mr. Ota received the 2017
Vaughn-Uyeda Memorial International Journalistic Prize for his coverage of China's “One Belt, One Road” initiative andother issues. He has given presentations and spoken at international conferences, including the Davos Forum.

Editor: Reiko Kanda, Maiko Sakaki and Tatsuya Yamaji. This is a translation of a paper originally published in Japanese.
NIRA bears full responsibility for the translation presented here.
Copyright Ⓒ 2023 by Nippon Institute for Research Advancement

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My Vision No.68
2023.11
Expert Opinions

Avoiding Fragmentation and Advancing Semiconductor Technology
Through International Collaboration
Japan's semiconductor industry has been facing adverse
conditions for many years. Now, in the name of “economic security,” theindustry has suddenly been thrust into the limelight. I cannot help but
feel a sense of unease about this. Semiconductors are used in all areasof our lives, from smartphones onwards, and are essential to people
throughout the world in today's ever-advancing information society.
Contributing to fields including AI, EVs, and the effective use of energy
in power generation, all of which will continue to expand in future, it
is clear that semiconductors will make a significant contribution to theHitoshi Wakabayashi
resolution of social issues, and will represent a common good toProfessor, Integrated Green-niX+
humanity. Even beyond the perspective of economic security, we
Research Unit, Institute ofmust recognize that the semiconductor industry is a vital one.
Innovative Research, Tokyo
Further, it is undesirable for the semiconductor industry to be
Institute of Technology
compartmentalized on a country-by-country basis for reasons of
economic security. The manufacture of semiconductors involves acomplex and diverse range of steps, from design, through procurement of raw materials and functional
materials, to the set-up of manufacturing equipment and the manufacture of integrated circuits, which caninvolve more than 1,000 processes. This necessitates “knowledge integration” through collaboration among
diverse countries and companies. If only ally countries work together, there is no doubt that the evolutionof semiconductor technology will slow down and their utilization will be restricted. As an engineer, I do notwant to see the knowledge that has been painstakingly accumulated over the years destroyed by ideology.
The issue of climate change, which is a shared challenge for humanity, is an issue that must be
urgently addressed, and these country-by-country divisions make it doubtful whether humanity will beable to achieve ongoing prosperity. Is there really no way to make cooperation with other countries afoundation of semiconductor policy? The world recognizes the importance of Japan in the field ofsemiconductors, both technologically and as a market. While indicating its own direction, Japan should
strategically formulate an outline of the type of presence it seeks to be viewed as by other countries in the
supply chain.
At this stage, semiconductor policy is being led by the national government. However, when thegovernment has progressed with projects to a certain extent, it will be desirable for companies to step
forward to boost their profits and expand their activities. In this case, open collaboration among companies
will also be very important. Five years in the future, the market will see the emergence of “chiplets,” which
combine multiple chips (CPUs, memory chips, etc.) into a single package; as a result, “system integrators,”
which integrate the products of multiple companies, will become important. If this is the case, collaboration
among multiple companies to create a single product will become a matter of course. It will be importantfor companies to not merely consider their own interests, but to adopt a “sanpo yoshi” (benefit to buyer,
seller and society) philosophy or a way of thinking that incorporates a wider range of stakeholders andcontexts, and to proceed in collaboration with other companies in the same industry.
As the leader of the Integrated Green-niX+ Research Unit of the Tokyo Institute of Technology’s Institute of Innovative
Research, Professor Wakabayashi is promoting research and the development of human resources in the area of integrated
circuit technology in order to realize green semiconductors with low environmental impact. Bringing together leading
researchers and promoting joint research with companies, he aims to be a game changer in greening Japan's integrated
circuit industry and supply chain. After completing his M.E. degree at the Tokyo Institute of Technology, he worked for NEC
Corporation and Sony Corporation before becoming a professor of Electrical and Electronic Engineering in the Tokyo Instituteof Technology's School of Engineering. Professor Wakabayashi has held his current position since July 2023, having served
as Director of the Research Institute for the Earth Inclusive Sensing, and Member of the Education and Research Council
in Tokyo Institute of Technology. He holds a Ph.D. in Engineering, and is now a member of the Board of Directors of theJapan MOT Society.

Editor: Reiko Kanda, Maiko Sakaki and Tatsuya Yamaji. This is a translation of a paper originally published in Japanese.
NIRA bears full responsibility for the translation presented here.
Copyright Ⓒ 2023 by Nippon Institute for Research Advancement

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