Podcast: Japan's quest for the most powerful microchip leads semiconductor revival

In the 1980s, Japan was the dominant player in the semiconductor market. But huge shifts in the way the chip supply chain operated eroded that leading-edge.

Countries like Taiwan with TSMC, the world's largest and most advanced semiconductor manufacturer, began to dominate in the production of chips. The U.S. is key in areas like design. While the Netherlands has ASML, a company that makes tools required to manufacture cutting-edge chips.

Japan is now on a drive to revitalize its semiconductor industry.

Tokyo has unlocked billions of dollars of subsidies for the sector. At the heart of its revival efforts is Rapidus Corporation, a company founded in 2022 by the Japanese government and eight domestic companies to develop and manufacture advanced semiconductors.

Rapidus Corporation aims to manufacture 2 nanometer chips by 2027, as it looks to catch up to TSMC and Samsung.

In this episode of Beyond the Valley, Tom Chitty and I are joined by Fei Xue from the Economist Intelligence Unit (EIU), to talk about Japan's efforts to reignite its domestic semiconductor industry.

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Here is a transcript of the "Beyond the Valley" episode released on August 6, 2024. It has been edited for clarity and brevity. 

Tom Chitty

By now, you're probably aware of the importance of semiconductors. They're in everything from smartphones to running shoes, and are a vital component in the development of Gen AI. But you may not know that back in the 1980s Japan occupied more than half of the global semiconductor market. Since