Will TSMC launch be the first step in Japan's semiconductor "revitalization"?

February 27th 16:48

A factory built in Kumamoto Prefecture by TSMC, the world's largest Taiwanese company in the contract production of semiconductors, has started operations.

The construction of a second factory for cutting-edge semiconductors has also been decided, and the total investment is expected to exceed 3 trillion yen.

The Japanese government, which invited TSMC, will provide up to 1.2 trillion yen in subsidies.

We will explore the aims of the unprecedented amount of aid and the challenges facing the ``revitalization'' of Japan's semiconductor industry.

(Economy Department reporter Kenta Shimai, Akiko Nishigata)

TSMC, the world's most advanced company, is located in Kumamoto

The opening ceremony for the Kumamoto factory on the 24th was attended by key people from Japan and Taiwan, including Morris Chan, known as the founder of TSMC.

Expectations from the Japanese side are high, and the words of Minister of Economy, Trade and Industry Saito indicate that the Japanese government is putting effort into attracting a TSMC factory.

Minister of Economy, Trade and Industry Saito

said, ``The opening ceremony of Japan's first factory is extremely significant as it fills a missing piece in Japan's semiconductor industry.''

What kind of company is TSMC, which is said to be the "missing piece of the Japanese semiconductor industry"?

Established in Taiwan in 1987, the company has grown to become the world's largest company through a business model known as a "foundry," which handles contract production for other semiconductor manufacturers.

It produces semiconductors with a wide range of applications and performance, and is said to be supported by the company's mass production technology for cutting-edge products such as Apple, which is famous for its iPhone, and Nvidia's products, which are attracting attention due to the rise of generative AI.

In order to reduce manufacturing costs and improve performance, semiconductor manufacturers are competing with each other using ``miniaturization'' technology, which reduces the width of integrated circuits in units of ``nanometers'', which is one millionth of a millimeter. , TSMC has achieved the world's highest level of mass production of 3-nanometer cutting-edge semiconductors and is leading this competition.

Producing logic semiconductors that serve as the “brain”

TSMC produces "logic semiconductors" that perform advanced arithmetic processing in Kumamoto.

It is a product that acts as a human "brain" so to speak.

The two factories plan to produce products used in automobiles, industrial equipment, and high-performance computers, and the second factory, which is scheduled to start operating by the end of 2027, will also handle cutting-edge semiconductors of 6 to 7 nanometers.

The total investment for the two factories is expected to be more than $20 billion, or more than 3 trillion yen in Japanese yen, and the Japanese government will provide up to 1.2 trillion yen in subsidies.

In fact, Japan only has the technology to manufacture logic semiconductors up to 40 nanometers.

TSMC's technology can truly be called a "missing piece" for Japan, and the government hopes that this invitation will help improve the technology of the domestic semiconductor industry.

Japan's semiconductor industry has fallen from the top of the world

Today, Japan is attracting semiconductor factories to the country with the help of Taiwanese companies, but there was a time when Japan's semiconductor industry was highly competitive and ranked among the top in the world.

Approximately 40 years ago, in 1985, of the top 10 companies in terms of sales, five were Japanese manufacturers, including the top company NEC.

In 1988, Japanese manufacturers' share exceeded 50%.

However, trade friction with the United States, which perceived Japan as a threat, intensified, and the Japan-U.S. Semiconductor Agreement was subsequently concluded, obliging Japan to import semiconductors made overseas.

Coupled with the rise of Korean and Taiwanese manufacturers, Japan's competitiveness declined.

Currently, the market share is around 10%.

There were some government-led projects to support the semiconductor industry, but they failed to lead to Japan's restoration.

Although there are areas where Japan remains strong, such as semiconductor manufacturing equipment and materials, the competition to miniaturize cutting-edge semiconductors, which requires huge investments, has caused Japanese manufacturers to completely drop out and become dependent on imports. is.

Coronavirus amid US-China conflict: Semiconductors become “important supplies” for economic security

However, due to the struggle for supremacy between the United States and China and the semiconductor shortage caused by the coronavirus pandemic, the world has entered an era in which it is no longer possible to rely on foreign countries to procure semiconductors.

Semiconductors are used in all kinds of products, including home appliances, so once the supply is cut off, it will no longer be possible to manufacture such products.

When there was a global shortage of semiconductors due to the spread of the new coronavirus, automobile production frequently stopped in Japan, and digital cameras and game consoles continued to be out of stock.

The free trade system is also being shaken as the US-China conflict intensifies, with the US imposing strict controls on exports of semiconductor products and equipment to China.

The Japanese government believes that if the global supply chain is disrupted due to the Taiwan emergency, there could be another semiconductor shortage, which would have an impact on our lives and the economy.

Semiconductors were seen as an "important commodity" for economic security that the country needed to ensure a stable supply of, and countries around the world, including Japan, began to attract domestic production.

In addition to TSMC, the Japanese government also provides huge amounts of support to the semiconductor industry.

We have decided to provide 330 billion yen to Rapidus, which aims to domestically produce cutting-edge semiconductors, and have supported the establishment of new production bases and equipment enhancements, bringing the total budget secured to date to 4 trillion yen.

Manufacturers are increasing their investments with the help of such government support.

Semiconductor “revitalization” issue is lack of specialized human resources

The public and private sectors have once again begun working toward the ``revitalization'' of the semiconductor industry, but as companies expand their capital investments, the shortage of specialized engineers is becoming increasingly serious.

With the decline of Japan's semiconductor industry, the number of human resources responsible for the industry has decreased.

The number of employees in semiconductor-related industries was about 230,000 in 1999, but in 2019 it was about 168,000, a decrease of 27% in 20 years.

(Source: Ministry of Economy, Trade and Industry)

Furthermore, industry groups predict that the eight semiconductor manufacturers with factories in Japan alone will need an additional 40,000 people over the next 10 years.

TSMC is not included in this list, and it appears that securing human resources is even more difficult.

Under these circumstances, Tokyo Electron, one of the world's largest manufacturers of semiconductor manufacturing equipment, is aiming to raise wages and survive the competition for human resources compared to overseas competitors.

This April, we have decided to raise the starting salary of new employees who join the company as new graduates by 85,500 yen, and the starting salary for engineers will be 304,800 yen for university graduates and 320,000 yen for master's graduates. increased.

We plan to hire 10,000 new people over the five years starting in 2025, and our policy is to attract specialized human resources from both Japan and overseas.

Mitsuhiro Furusawa, head of the company's human resources department, said, ``The number of human resources involved in semiconductors is limited, and each company is looking for overlapping human resources.As semiconductor investment is progressing around the world, we are constantly looking at the competition and hiring human resources globally. We need to continue acquiring them."

How to foster “industries that use semiconductors”?

The semiconductor industry is booming with active domestic investment, but the challenge is whether such investment can be linked to strengthening Japan's industrial competitiveness.

The semiconductor industry has been exposed to waves of boom and bust, also known as the "silicon cycle."

Recently, the performance of major semiconductor company KIOXIA Holdings has deteriorated significantly due to the deterioration in the global flash memory market.

The final profit and loss for the nine months ending December last year was a deficit of over 250 billion yen.

Due to deteriorating market conditions, many employees are forced to reduce production and retire early.

On the other hand, the company plans to receive up to approximately 240 billion yen in subsidies from the Ministry of Economy, Trade and Industry, and to invest approximately 720 billion yen in capital to produce high-performance memory semiconductors, but the challenge is to quickly rebuild business performance. It has become.

In the field of cutting-edge logic semiconductors, which the country has focused on by attracting TSMC, Rapidus is also aiming to domestically produce products with dimensions of 2 nanometers or less that have not been put into practical use anywhere else in the world.

However, some point out that the issue is not only how to succeed in mass production, but also securing suppliers.

Takahiro Takashi, executive officer of Deloitte Tohmatsu Consulting, a major consulting company with extensive knowledge of trends in the semiconductor industry, believes that while continuing to invest persistently in order to avoid losing in technological competition, it is important for Japan to create a strong industry that can support demand for semiconductors. I point out that.

Takahiro Takashi, Executive Officer

: ``The semiconductor industry is greatly affected by trends in final products.Even if we strengthen our production capacity, if there are no buyers for our products, we will be putting the cart before the horse, and eventually we will run out of steam and become unviable as a production base.'' It is extremely important to be strategic about what products to target, and it is extremely important to develop strong players who can lead to demand for semiconductors in areas such as automobiles and AI (artificial intelligence).

Japan's semiconductor "revitalization"

At the opening ceremony of the Kumamoto factory, TSMC founder Zhang Zhongmi, who is known as the ``father of Taiwan's semiconductor industry,'' said, ``I believe this is the beginning of a renaissance in semiconductor manufacturing in Japan, and I have high hopes for it.'' said.

I would like to examine through interviews whether Japan's semiconductor industry can be ``revitalized'' as these words say, given the huge amount of budget that is being spent on it.

(Broadcast on “News 7” etc. on February 24th)

Kenta Shimai,

Economic Affairs Reporter Joined

the agency in 2012

After working at the Miyazaki Bureau and Morioka Bureau, he currently belongs to the Bureau.

Economic Department reporter

Akiko Nishigata Joined the agency

in 2020

After working at the Fukuoka Bureau, she currently belongs to the agency