GT Voice: Japan bound to get hurt in American 'chip war'
Published: Dec 11, 2022 11:20 PM Updated: Dec 12, 2022 12:00 AM
Photo: VCG

Photo: VCG

The US is ratcheting up pressure on its allies, including Japan, to follow Washington's lead in controlling exports of semiconductor-related products and technology to China. If the US ropes in enough allies to launch a full-scale "chip war" against China, the global chip industry, especially domestic industries in those countries, will pay a huge price for this at the expense of their future development opportunities.

During a phone conversation with Japanese industry minister Yasutoshi Nishimura on Friday, US Commerce Secretary Gina Raimondo directly asked the Japanese government for cooperation in stymieing China's efforts to develop high-end semiconductors, noting that the countries are allies sharing strategies against China, Japan's Kyodo News Agency reported on Saturday, citing sources familiar with the matter.

It was believed to be the first ministerial request made by the US to Japan on export curbs of chip-making equipment to China, according to Japanese media. While the Japanese government has yet to clarify its stance on the issue, Washington's intention of starting a full-blown "chip war" is already disturbing enough for the global chip industry. This is because the US attempt to crack down on China by weaponizing the chip supply chain is bound to see disastrous consequences for the industry.

Raimondo's request came just a few days after Bloomberg reported that the Netherlands is planning new limits on exports of chip-making equipment to China and a deal with the US could be announced next month, which is apparently a result of US pressure. Last month, Dutch Foreign Trade Minister Liesje Schreinemacher just said that the US shouldn't expect the Netherlands to unquestionably adopt its approach to China export restrictions, according to Bloomberg.

Since Japan's Tokyo Electron Ltd and Dutch firm ASML are the world's leading chip equipment makers in addition to their American peers, "cooperation" from the Netherlands and Japan is crucial to the successful implementation of the US' latest exports curbs aimed at containing China's development and technological progress in the high-end semiconductor sector.

The US may want to rope in other allies to form a technological iron curtain in order to suppress China's development while restoring its own dominance in the semiconductor sector. But what Japan and the Netherlands must be reminded of is that in a technological cold war that is likely to bring fundamental changes to the global order, no one will be the winner, and their own interests will be badly hurt with their companies' competitiveness weakening.

Forcing companies or economies to take sides in the technological cold war will essentially undermine the foundation of the global industrial chain, posing a serious threat to the security of the global supply chains. And a collapse of the global chip supply chain will end up causing damage to everyone.

Also, the US may not necessarily get what it wants. This is because chips are the product of global collaboration, and China is the largest market of the global semiconductor industry, which is big enough to allow it to develop the chip technologies and pursue cooperation with other global players despite Washington's hegemonic obstruction. While it may take China a long time to develop its own cutting-edge semiconductor supply chain, China won't be defeated by a US-led "chip war". China has the world's largest and most comprehensive manufacturing system, and if it fights back, it won't just be limited to the chip industry.

The US-Japan trade war during the 1980s exacerbated the collapse of the Japanese semiconductor sector. Should Japanese semiconductor companies again become the cannon fodder of the US "chip war" today? Japan is advised to think about the potential consequences before once again betting on Washington to deliver. The choice is critical to its chip industry for decades to come.