Japanese Semiconductor Giants to Invest 31 Billion US Dollars to Revive Industry

Recently, in order to revive its once glorious semiconductor industry and regain its leadership in the global semiconductor field in order to reduce its dependence on potential supply chain risks amid Sino-US tensions, the Japanese government announced an ambitious investment plan, investing $31 billion as strategic support.

Against this background, on July 9, the Nikkei News reported an eye-catching news: Sony, Mitsubishi Electric, Rohm, Toshiba, Kioxia, Renesas, Rapidus, Fuji Electric and other eight major Japanese semiconductor manufacturers, based on optimistic expectations for the rapid development of AI technology and the growing global carbon reduction market, jointly formulated a long-term equipment investment plan from 2021 to 2029. The plan predicts that these companies will invest a total of about 5 trillion yen (about 31 billion US dollars) in the next eight years, aiming at technological breakthroughs and capacity expansion in key areas. These investments will focus mainly on the production of power semiconductors, image sensors and logic semiconductors, which occupy a core position in economic security.

Researcher Pan Gongyu analyzed that Toshiba, Renesas, Kioxia, Rohm, Mitsubishi Electric and other companies are all leaders in the field of automotive electronics in Japan, and each has demonstrated strong market dominance in its field of expertise. Toshiba occupies a leading position in vehicle storage solutions, providing efficient and reliable data storage support for the automotive industry; Renesas occupies a high share in the high-end automotive microcontroller (MCU) market, and its MCU products are widely used in various control systems of automobiles and are one of the core components of automotive electronics. Kioxia has performed particularly well in the field of silicon carbide MOSFET. Given that silicon carbide materials are regarded as the key to future power electronics technology due to their excellent performance, Kioxia’s products have played an important role in improving the energy efficiency of electric vehicles and shortening charging time.

On the other hand, Rohm also occupies a place in the IGBT market. In addition, Mitsubishi Electric, as a comprehensive manufacturer of electronic and electrical products, also has a deep accumulation in the field of automotive electronics, and its product lines cover a wide range, including but not limited to motor drive systems, battery management systems, etc. These companies not only have strong technical strength, but also have a high degree of overlap in their customer groups, mostly Japanese host car manufacturers such as Toyota, Honda, and Nissan. They have formed a close supply chain relationship and together constitute the Tier 1 echelon of Japan’s automotive electronics industry.

The report pointed out that Sony Group plans to invest about 1.6 trillion yen to increase the production of image sensors from fiscal 2021 to fiscal 2026. This move is aimed not only to meet the strong market demand for products such as smartphone cameras, but also to foresee that image sensors will be further expanded to the field of autonomous driving and monitoring systems in factories and stores. In addition, Sony Group has proposed a policy to expand the latest plant in Nagasaki Prefecture and set up a new plant in Kumamoto Prefecture in 2023.

In the field of artificial intelligence logic semiconductors, Rapidus aims to produce cutting-edge 2-nanometer products. They have planned to put a prototype production line into operation in Chitose City in April 2025 and expect to achieve mass production of the product in 2027. In the future, they may further increase capital investment to expand the scale. At present, the Japanese government has announced that it will provide investment support of up to 920 billion yen for the project, including R&D expenses.

In addition, Mitsubishi Electric has set a goal to increase its production capacity of silicon carbide power devices to five times the level of fiscal 2022 by fiscal 2026. To achieve this goal, the company plans to invest approximately 100 billion yen to build a new production plant in Kumamoto Prefecture. Mr. Kei Uruma, President and CEO of Mitsubishi Electric, said: “We will build a structure that can compete with the international industry giant, Infineon Technologies of Germany, to consolidate our market position in the field of silicon carbide power devices.”

Toshiba and Rohm are also increasing their investments, mainly to expand their influence in markets such as AI data centers and electric vehicles. They have invested a total of about 380 billion yen. Toshiba plans to expand the scale of its factory in Ishikawa Prefecture in central Japan to increase the production of silicon power devices; while Rohm plans to increase the production of energy-saving silicon carbide power devices at its factory in Miyazaki Prefecture, Kyushu.

In response to the total investment plan of 5 trillion yen proposed by these eight companies, the Japanese government has clearly promised to provide about 1.5 trillion yen in subsidies to encourage and accelerate the innovation and development of the domestic semiconductor industry. This series of measures will undoubtedly inject new impetus into Japan’s competitive position in the global semiconductor market.

It is worth noting that the Japanese government’s support for the semiconductor industry is not achieved overnight, but has a deep foundation and long-term planning. In the past less than three years, the government has allocated about 4 trillion yen to support the industry. This continuous and stable investment has laid a solid foundation for the rapid development of the industry.

The revival of Japan’s semiconductor industry is not only a deep tribute to its glorious history, but also a bold investment in the future. This investment plan of up to 31 billion US dollars, with the firm policy support of the government, is expected to lead Japan to re-establish its competitive advantage in the global semiconductor market. However, this road to revival is not an easy one. It requires Japanese semiconductor companies to have the courage to overcome numerous technical challenges, flexibly respond to fierce market competition, and consolidate their position in the global supply chain system. Despite the challenges, the road to revival of Japan’s semiconductor industry is also full of hope and opportunities.