Japan breathes new life into chip industry with specialised alternatives
To breathe new life into its volatile chip industry, Japan needs to adopt a specialist strategy instead of competing on volume and price, Jun Sawada, chairman of telecom group NTT, said in a recent interview with Reuters.
NTT is a key investor in Rapidus, a government-backed chip manufacturer that plans to start mass-producing advanced semiconductors by 2027. Rapidus is a cornerstone of Japan’s ambitious plan of more than €55 billion to strengthen its chip and artificial intelligence (AI) sectors.
Major Japanese banks have pledged substantial loans totaling around 2 trillion yen (€11 billion) to support Rapidus’ efforts.
Japan’s dominance in the global chip market weakened in the latter part of the 20th century, when the country focused on low-cost mass production, a strategy that ultimately proved unsustainable.
Sawada insists a different approach is needed this time. He believes Japan should prioritise producing a diverse range of highly specialised chips in smaller volumes so it can command premium prices for these niche products.
Japan’s push to revive its chip industry is in line with the United States’ efforts to secure a stable chip supply chain in response to China’s rapid technological advances. Sawada suggested that Rapidus use NTT’s IOWN technology, which employs light to transmit data, resulting in higher speeds and lower power consumption than conventional methods.
Sawada, who previously chaired the Japan-US Business Council, sees some aspects of President Donald Trump’s policies as favourable for Japan. While he acknowledges concerns about US tariffs, he stresses Japan’s commitment to invest $550 billion dollars (€467.9 billion) in the US as a major opportunity. Sawada viewed this investment as a way for Japanese companies to gain access to the market and win market share, despite the tariffs.
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