US, Japan discuss supply chains, semiconductors in ‘2-plus-2’ talks in face of China’s rise and Russia’s war

Name: There’s a global semiconductor shortage and this is why it matters
Uploaded: 2022-07-29T06:28:59.000Z
Duration: 6 min 1 s
Description: There’s a global semiconductor shortage and this is why it matters

Officials are expected to discuss ways to enhance economic security, including over key technologies and infrastructure

US, Japan eyeing collaboration on research and development of next-generation semiconductor technology expected to be used for artificial intelligence

Reading Time:3 minutes

Why you can trust SCMP

Top foreign and economy officials from the US and Japan will meet to affirm their cooperation in building resilient supply chains for key technologies such as semiconductors and enhancing a rules-based order in the face of challenges posed by China and Russia. Photo: Shutterstock

Kyodo

Published: 2:28pm, 29 Jul 2022

Top foreign and economy officials of the United States and Japan will meet on Friday to affirm their cooperation in building resilient supply chains for key technologies such as semiconductors and enhancing a rules-based order in the face of challenges posed by China and Russia.

The economic “two-plus-two” meeting, a framework akin to the bilateral security talks involving the countries’ foreign and defence chiefs, will be joined by US State Secretary Antony Blinken, Commerce Secretary Gina Raimondo as well as Japanese Foreign Minister Yoshimasa Hayashi and Economy, Trade and Industry Minister Koichi Hagiuda.

With the two allies increasingly feeling the need to address their economic vulnerabilities to ensure national security in the face of China’s rise and Russia’s war on Ukraine, the officials are expected to discuss ways to enhance economic security, including over key technologies and infrastructure.

06:01

There’s a global semiconductor shortage and this is why it matters

The semiconductor supply chain is increasingly under scrutiny as the coronavirus pandemic has triggered a global shortage of the essential components used in everything from smartphones and laptops to cars as well as national defence systems.

The United States is also mindful that the world’s semiconductor manufacturing capacity is concentrated in East Asia, with Taiwan accounting for 20 per cent of the global total in 2019, followed by South Korea, Japan, China and the United States, according to a June 2021 report by the White House.

A report from Boston Consulting Group and the Semiconductor Industry Association in April 2021 also showed that Taiwan accounted for 92 per cent of the world’s manufacturing capacity for the most advanced chips – described as below 10 nanometres – followed by South Korea that held the remaining share.

Overreliance on overseas chips, especially in a region of high geopolitical tension, can be viewed as a risk.