Global chipmakers will expand in Japan as technological innovation accelerates.

Seven of the world’s largest semiconductor makers have announced plans to boost manufacturing and technology partnerships in Japan as Western allies step up efforts to reshape the world’s chip supply chain amid rising tensions with China.

In an unprecedented meeting in Tokyo with Japanese Prime Minister Fumio Kishida, chief executives of chipmakers Taiwan Semiconductor Manufacturing, South Korea’s Samsung Electronics and Intel and America’s Micron outlined plans that could change Japan’s recovery hopes.

Micron said it expected to invest up to ¥500bn ($3.7bn), including subsidies from the Japanese government, to build a plant in Hiroshima to produce cutting-edge ultraviolet lithography technology.

Samsung is also discussing setting up a ¥30bn research and development center in Yokohama with test lines for semiconductor devices. Japanese government officials say the move comes as ties between Tokyo and Seoul have eased. Samsung was not available for comment.

Japan’s Minister of Economy, Trade and Industry, Yasutoshi Nishimura, said following a meeting with Chip CEOs that “Japan’s role has been elevated as like-minded countries work to strengthen their supply chains. We reaffirmed the strong potential for Japan’s semiconductor industry.

The announcement comes as Japan prepares to host the Group of 7 summit, where economic security will be at the center of discussions. Semiconductors have emerged as an area of ​​particular focus for the US and its allies.

The easing of the long-running dispute between South Korea and Japan comes as the US has deployed significant diplomatic capital to encourage rapprochement between its regional allies to counter the threat of Chinese technological and military power and reduce dependence on chips manufactured by TSMC. and others in Taiwan.

TSMC, the world’s largest contract chipmaker, has hinted at further investment in Japan after agreeing to build a new factory in southwestern Kumamoto.

Nishimura also mentioned discussions with Intel about further cooperation with Japanese chipmakers, and said they have discussed a collaboration between Applied Materials, IBM and Japan’s Rapidus.

The chipmakers’ gathering in Tokyo adds further definition to the industry’s bandwagon; The strained relationship between the United States and China also sheds further light on emerging industry groups as they show signs of convergence in global supply chains.

“Investing in secure supply chains and strategic partnerships for your economic and national security is a keystone of economic coercion,” US Ambassador to Japan Rahm Emanuel told the Financial Times.

Under Japan’s Economic Security Act last year, the government has declared semiconductors an essential product for daily life and economic activity.

Nishimura said the government will use the ¥1.3tn allocated in Japan’s supplementary budget last year to support commitments made by foreign chipmakers.

Ahead of the G7 summit, Kishida is scheduled to meet with US President Joe Biden on Thursday. The leaders of the two countries are expected to announce a $70 million agreement to educate and train 20,000 semiconductor engineers, including Purdue University, Hiroshima University and Tohoku University.

Japan’s use of generous subsidies to lure chipmakers comes amid concerns that efforts to expand its semiconductor industry could be hampered by the country’s shrinking workforce, including a chronic shortage of engineers.

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