Global chip shortage enters realm of national security Global chip shortage enters realm of national security
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Global chip shortage enters realm of national security

    NHK Senior Economic Commentator /
    NHK World Special Affairs Commentator
    A fire at a Japanese semiconductor plant is fueling fears that the global chip shortage will soon go from bad to worse. Securing a stable supply will be high on the agenda at a summit this week between the leaders of Japan and the United States, who both see the problem as a threat to economic and national security.

    Renesas Electronics is one of Japan’s top semiconductor manufacturers, especially in the field of microcontroller units for automobiles. Company officials aim to restart production this week at the firm’s Naka plant in Ibaraki Prefecture, north of Tokyo, after the March 19 fire. But they say output won’t return to normal until late June at the earliest. The Japanese government has been asking Taiwan semiconductor manufacturers to outsource production, but they’re already struggling to meet demand because of surging orders.

    The global shortage has laid bare the need to maintain a stable supply in an era of rapid digitalization, especially for the auto and electronics industries, which could be brought to a halt.

    The industry is starting to realize that relying too heavily on geopolitically unstable regions such as Taiwan and China can be problematic. US President Joe Biden said in February that his country will review its supply chains for key items such as rare earths and semiconductors. In a thinly veiled reference to Beijing, he said the US should not need to rely others who do not share the same values.

    Meanwhile, Japanese semiconductor makers are estimated to have just 10 percent of the global share. An expert panel set up by the industry ministry last month has pointed to the need for policies that improve supply chains. It will also study ways to promote investment in semiconductors for automobiles and leverage the advantages of domestic chips. It plans to draw up a series of proposals by May.

    Japanese Prime Minister Suga Yoshihide is scheduled to meet Biden in Washington on April 16. The two countries will discuss ways to strengthen their supply chains.

    White House Press Secretary Jen Psaki said last week that the US-Japan alliance is a cornerstone of peace, security and prosperity, adding this is "one of the reasons why we're working to deepen our close coordination across a variety of areas, including supply chains."