Japan to increase chip-gear spending faster than any other nation

Japan is poised to sharply raise its chip-gear spending in an attempt to boost its position in the global semiconductor market, as it tightens exports amid a US-led push to limit China’s tech ambitions.

Japan is expected to spend US$7 billion on wafer fab equipment next year, which would mark an 82 per cent jump from this year – the largest in the world – according to data from SEMI, a global association of chip-making equipment producers. That compares with a 2 per cent increase forecast for China and the total amount would be higher than the combined spending in the European and Mideast markets.

While Taiwan remains the largest spender – US$24.9 billion expected in 2024 – on chip-fabrication equipment, Japan’s aggressive investment complements a US push to reconfigure global semiconductor supply routes and sources.

Japan has long been a leading producer of equipment and materials necessary to make chips, and is now leveraging its position to woo major chip makers such as Taiwan Semiconductor Manufacturing Co and South Korea’s Samsung Electronics.

It is also tightening its grip on crucial equipment. Tokyo said last week it would expand curbs on shipments of 23 types of cutting-edge chip-making tools, including extreme ultraviolet mask-testers, immersion lithography machines and silicon-wafer cleaners.

Japan’s goals include developing next-generation chips, such as solar panels used to harvest clean energy, that would galvanise its tech industry and economy, according to Yeon Wonho, a supply chain analyst at the Korea Institute for International Economic Policy.

“Japan wants a breakthrough with chips,” Yeon said. “It wants to team up with countries like the US for joint research while attracting manufacturing facilities to its soil.”