Japan’s sublime semiconductor supply chain

By Reuters Plus – Our increasingly online and automated lives are enabled by innovation in semiconductors. Japan’s own history with chipmaking goes back to Sony’s seminal transistor radios of the 1950s and continued on with calculators and a host of other electronic devices in subsequent decades. Now driven by AI, the Internet of Things (IoT) and digitalization, global semiconductor demand is rising sharply. 

Against this background, the government of Japan has made the sector a priority, providing comprehensive support and funding. But underpinning the industry is a world-leading supply chain that has flourished in Japan since chips became indispensable to technological progress.

Generous government subsidies combined with ‘friendshoring’ are triggering a boom in the industry with investments by companies including TSMC, Micron, Samsung and Rapidus. Diversification of manufacturing in response to the pandemic and geopolitical risks is further boosting Japan’s appeal as a semiconductor hub. New fabs and R&D centers being built from Kyushu in the south to Hokkaido in the north. 

The entry into Japan of Tenstorrent, a leader in next-generation chips for AI, speaks to this trend. Tenstorrent’s management, led by renowned chip architect Jim Keller, recognized Japan’s expertise in the field but initially had reservations.  

“One of the concerns was that while Japan produced high-quality, reliable cars and electronic goods, there was a lag when it came to the shift to EVs, AI and automation. I pointed out that is actually a business opportunity to be the last piece of the puzzle, and the management in the US grasped it very quickly,” explains Mamoru Nakano, country manager for Tenstorrent Japan.

Established in January 2023, Tenstorrent Japan in November that year announced a partnership with Rapidus, a venture backed by investment from eight Japanese corporations and government support with the aim of manufacturing next-generation 2-nanometer (2 nm) chips. The collaboration is focused on developing chips for edge AI devices, and was followed in February 2024 by news of another joint project, for an edge-AI accelerator, which speeds up reasoning for generative AI. 

Japan’s Ministry of Economy, Trade and Industry is providing a total of 28 billion yen ($183 million as of Nov 8, 2024) in related funding for edge-AI accelerator projects through the New Energy and Industrial Technology Development Organization (NEDO), a national R&D agency. One of the projects will be run by the Leading-edge Semiconductor Technology Center (LSTC), which will partner with Tenstorrent. 

“We’re working with Rapidus and other collaborating companies with which we have close relationships, not just on producing cutting-edge chips, but also to create state-of-the-art IP that can be utilized by the private sector and national research projects,” adds Nakano, a veteran of Japan’s semiconductor industry.

Somewhat overlooked on occasions is the wealth of Japanese companies with leading tech in semiconductor materials, components and specialist machinery. 

Pierre Cambou, chief global semiconductor analyst at Yole Group, notes, “Japan is currently the main supplier of silicon wafers, the base material upon which everything is built. It is also home to one of the key players in lithography equipment, which is at the heart of semiconductor technology.” Full article

Source : www.reuters.com