Japan hopes to be ‘best partner in Asia’ for foreign tech firms as it seeks to reclaim industry edge

US tech giants are pumping billions of dollars into artificial intelligence, cybersecurity and chip production in Japan, which dominated the hardware industry in the 1980s.

“Geopolitical tensions have made Japan a more attractive and stable partner compared to China,” said Khos-Erdene Baatarkhuu, CEO of fintech company AND Global.

But “now, with supportive government policies, resilient start-ups, and a potentially shifting global tech scene, Japan has an opportunity to regain its tech edge”.

It’s not there yet, however. Japan was ranked a lowly 32nd in the latest global classification of digital competitiveness by Swiss management school IMD.

And only seven Japanese firms appear among more than 1,200 tech “unicorns” – start-ups worth more than US$1 billion – listed by CB Insights.

A “perfection-seeking approach” and preference for “stability and gradual improvement” among businesses is partly to blame, Khos-Erdene said.

“The traditional corporate culture in Japan tends to be risk-averse and hierarchical, which can stifle the rapid innovation typically seen in the software industry.”

“Wake up Japan!” he said at a corporate event in October. “I want to be on the side of evolution.”

They also agreed to work with “like-minded countries to strengthen global semiconductor supply chains” in a joint statement.

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World’s largest contract chip maker TSMC inaugurates its first plant in Japan

TSMC opened a new US$8.6 billion chip factory in southern Japan in February, and is planning a second, US$20-billion facility for more advanced chips.

On a visit to the TSMC plant this month, Kishida said he “felt first-hand the revival of our country’s semiconductor industry”.

“This is a great time to invest in Japan” with the yen’s value at a 34-year