Japan was once considered America’s biggest economic challenge, but now it is looking to collaborate with the world’s largest economy by directly attracting American executives to invest in emerging technology sectors in Asian countries, including artificial intelligence, electronic chips, and clean energy.
During his speech in Washington at a luncheon with American executives, Prime Minister Fumio Kishida affirmed that Japan welcomes American collaboration in “promising biotechnology” and assured them that any investment would be reciprocal.
On Tuesday, he said, “The economic growth our country achieves through your investments will be a source of funding for further investments in the United States by Japanese companies.”
Kishida, in the United States ahead of an upcoming summit with President Joe Biden on Wednesday, is expected to focus on defense and economic relations.
Last year, Kishida stated that Japanese foreign direct investment in the United States exceeded $750 billion, making Japan the largest foreign investor in America and creating over a million jobs.
Shortly before the luncheon, Microsoft (MSFT) announced its plans to invest $2.9 billion to enhance cloud computing infrastructure and artificial intelligence in Japan, and to open Microsoft’s first research lab in Asia in the country. This investment is the largest ever for the company in the second-largest economy in Asia.
Deputy President of Microsoft and its CEO, Brad Smith, attended the event along with more than a dozen other executives, including the Vice President of IBM, Gary Cohen; the CEO of Micron Technology, Sanjay Mehrotra; the CEO of Boeing’s Defense, Space, and Security division, Ted Colbert; and the CEO of Pfizer, Albert Bourla.
As the United States and Japan seek to modernize their political and military alliance, their close trade ties between Washington and Tokyo are growing. Both countries are monitoring regional threats from North Korea’s weapons tests and growing relations with Russia to Chinese aggression in the South China Sea and towards Taiwan.
Kishida said in an interview with CNN in Tokyo before his trip that escalating geopolitical tensions have pushed the world to a “historic turning point” and have led Japan to change its defensive stance.
At the luncheon event organized by the US Chamber of Commerce in Washington, the Prime Minister praised joint investment between the United States and Japan in the semiconductor industry. Rapidus, a chip manufacturer supported by Tokyo, is working with IBM to bring advanced chip technology to Japan.
In the semiconductor field, Rapidus collaborates with an American company in research and development for next-generation chips. Certainly, there will be more opportunities for cooperation between Japan and the United States, as he mentioned.
Earlier this month, the Japanese Ministry of Industry approved grants totaling up to 590 billion yen ($3.9 billion) to Rapidus. This is in addition to around 330 billion yen ($2.17 billion) in other promised grants from the government.
Using IBM technology, Rapidus is building a semiconductor manufacturing plant on Hokkaido Island. It aims to start trial production of nanometer-sized chips from April 2025, with plans to begin mass production in 2027, as reported by the chip manufacturer earlier to CNN.
Japan once dominated the global electronic chip industry, but it has lost this lead in recent years to companies like TSMC, Intel, and Samsung.
Rapidus aims to regain this position by investing in cutting-edge technologies and advancing collaboration in the semiconductor industry.
Countries are shifting towards chip manufacturing. This comes at a time when Washington is increasingly imposing restrictions on the types of chips that American companies can sell to China.Technological competition has escalated between the world’s largest economies in recent years. Last year, the United States urged its allies in Europe and Asia, including Japan, to restrict sales of advanced chip manufacturing equipment to China.
On Tuesday, Kishida also sought to dispel doubts about the strength of the Japanese economy, which lost its position as the world’s largest economy to Germany earlier this year.
He said: “We hope that 2024 will be the year when the Japanese economy will fully emerge from the recession and severe stagnation that has been weighing on our country.”
Last month, Japan ended a 17-year period of negative interest rates by raising them for the first time, marking a historic departure from years of aggressive monetary easing to combat chronic inflation.
(CNN)
