New Trade Rules for Chipmaking Equipment

According to the Ministry of Finance, Japan has introduced stricter foreign trade regulations for chipmaking equipment to bolster supply chain stability. Effective immediately, foreign investors are now required to notify the government before making direct investments in chipmaking equipment, including acquiring a 1% or greater stake in publicly listed companies or purchasing shares in private companies. This measure aims to mitigate the risks of technology leakage and prevent the misuse of commercial technologies for military applications.

Core Business Expansion and Security Measures

In addition to chipmaking equipment, Japan has expanded its list of “core business sectors” to include advanced electronic components, machine tool components, marine engines, fiber optic cables, and multifunctional machines. This expansion ensures that all critical products under the nation’s Economic Security Promotion Act are covered. The finance ministry anticipates that while the new regulations will strengthen national security, their impact on companies is expected to be minimal.

Reviving Semiconductor Production and Partnerships

This regulatory move aligns with Japan’s broader strategy to revitalize its semiconductor industry, a key component of its economic security strategy. Over the past three years, Japan has allocated approximately ¥4 trillion ($26.9 billion) to rejuvenate its semiconductor sector and advance digitalization. The government is also developing legislation to further enhance domestic chipmaking capacity. Tokyo has actively sought to attract foreign companies, such as Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), with significant subsidies to boost local chip production. However, critics argue that previous efforts failed due to a lack of collaboration with international firms.

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