Recently, the United States has taken unprecedented measures to control its semiconductor exports to China, in an effort to prevent the world’s second largest economy from taking the lead in the technology competition. Washington also called on its allies, including Japan, to follow its example.
Industry observers said that the Japanese government has not yet clarified its position, but if Tokyo and Washington stand together, Japan’s domestic chip industry is unlikely not to be harmed.
They also said that chip equipment and material manufacturers will be more affected than chip manufacturers, because Japan’s strong global players are concentrated in these areas.
“There is still some uncertainty about how these restrictions will work, but if we simply and directly interpret them, the Japanese chip industry will suffer huge damage,” said Masahiro Mori, a researcher at the Mitsubishi Institute of Comprehensive Research
Observers said that if Japan decided to follow the example of the United States, it would probably bring problems to Japanese enterprises exporting chip related products overseas. Sen Chong said, “They need to know where these things will eventually be used and what they will be used for. Otherwise, they cannot decide whether it is right or wrong.”
He also said that simply verifying such information will impose a burden on enterprises. If enterprises find their products in a gray zone, they may act cautiously and stop exporting.
Masayuki Kimura, chief operating officer of Deloitte Innovative Investment, said that the new regulations would hinder Japanese manufacturers of chip materials and manufacturing equipment, rather than chip manufacturers, who do not have the technology to produce advanced chips, such as chips for high-end smartphones.
Kimura said: “Considering the advantages of Japan (in the global chip industry), they are manufacturing machinery and materials, so (these companies) will be more affected.”
In recent years, the export of semiconductor manufacturing equipment has grown, and China has always been one of the major export destinations.
Last year, the value of the export of such equipment reached a record 3.3 trillion yen (100 yen is about 5 yuan, this website notes), with China accounting for the largest proportion, about 39%. From January to September this year, this figure exceeded 3 trillion yen.
Some chip related enterprises have considered the potential impact and are paying careful attention to how the situation will develop.
Chip equipment company Tokyo Electronics lowered its sales forecast for this fiscal year by 250 billion yen to 2.1 trillion yen. The company said half of the reduction was due to new export restrictions. Tokyo Electronics holds a considerable market share in some important semiconductor production machinery. In the last fiscal year, China was the company’s largest market, accounting for 28.3% of its total sales.
Tokyo Electronics Chief Executive Officer Hayashi Kawakami said that customers targeted by the United States may need to change their investment plans.
Although China has not yet obtained the necessary technology to develop super advanced chips for supercomputers and artificial intelligence, China has been making large-scale investment in the domestic chip industry to try to catch up with the international level. It has also set the goal of achieving 70% chip self-sufficiency by 2025.
Kimura said: “China is expected to manufacture more and more cutting-edge chips, but (due to the restrictions of the United States) Japan cannot meet these needs, so (Japanese chip equipment and material manufacturers are affected by) quite a lot.”
He also said that many Japanese chip related manufacturers he contacted were very cautious about doing business in China before the new restrictions were introduced. “They take the initiative to reduce or stop their exports to China. The new restrictions are stricter, so they will pay more.”
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Post time: Nov-29-2022