Japan seeks investment in AI, semiconductors from American companies
Speaking in Washington at a lunch with American CEOs, Prime Minister Fumio Kishida said Japan welcomes American collaboration in ‘critical and emerging technology’ and assured them that any investment would flow both ways.
Kishida is in the US ahead of a Wednesday summit with President Joe Biden expected to focus on defense and economic ties.
Last year, Japanese foreign direct investment to the US exceeded $750 billion, Kishida said, making Japan the biggest foreign investor in America and creating more than 1 million jobs.
Shortly before the lunch, a major technology company announced its plans to invest $2.9 billion to increase its cloud computing and AI infrastructure in Japan, and open its first research lab in the country. It is reportedly the company’s largest ever investment in Asia’s second-largest economy.
The closer business ties between Washington and Tokyo come as the two countries seek to modernize their political and military alliance. Both are eyeing regional threats from North Korea’s weapons testing and burgeoning relations with Russia to China’s aggression in the South China Sea and toward Taiwan.
At the lunch event, the prime minister praised US-Japan joint investment in the semiconductor industry. A Tokyo-backed chipmaker is working with a US company to bring advanced chip technology to Japan.
Earlier this month, Japan’s industry ministry approved subsidies worth up to $3.9 billion for the chipmaker. Utilizing technology from another company, the chipmaker is building a semiconductor fabrication plant, or fab, and aims to start pilot production of advanced chips from April 2025.
Japan once dominated the global semiconductor industry but lost its lead to other companies. This new chipmaker aims to mark the country’s comeback in chipmaking. The tech rivalry between the world’s two largest economies has been heating up in recent years.
On Tuesday, the prime minister also sought to dispel doubts about the strength of the Japanese economy, which recently lost its position as the world’s third-largest economy.
Last month, Japan brought an end to its era of negative interest rates with its first rate hike in 17 years, marking a historic shift away from an aggressive monetary easing program that was implemented to fight chronic deflation.