The B side of the "US-Japan chip alliance": "Vertical and horizontal alliances" cannot hide the loss of US hegemony

As we all know, as the chip shortage crisis sweeps the world and the role of semiconductors in national economic and technological development becomes increasingly important, many countries around the world have elevated the development of the semiconductor industry to a national strategic level. Therefore, some people believe that under the game and competition of various forces among major countries, the chip has gradually evolved from a high-tech product to a "weapon" in another sense.

Recently, U.S. President Joe Biden spoke at a weapons production plant in Troy, Alabama, about U.S. security assistance to Ukraine, emphasizing that each Javelin missile requires more than 200 semiconductors, and because of the global epidemic, the supply of semiconductors has been very tight. To this end, he urged the U.S. Congress to pass legislation to help the semiconductor industry and promote chip production to ensure that the United States becomes a major producer of semiconductors and computer chips.

At the same time, there is news that the United States and Japan will form a "chip alliance" to carry out cutting-edge semiconductor technology cooperation such as 2nm and Chiplet (small chips). This reminds people of the fact that the United States once "seriously damaged" the Japanese semiconductor industry almost 360 degrees without dead ends, causing it to retreat from the center of the stage to the "end of the edge". But even so, when the United States "enthusiastically" called again, Japan had no time to lick its past pains and was still willing to be a pawn, even seeing the neon lights on the other side of the ocean as the sun rising again.

It is not difficult to find that under the increasingly fragmented anti-globalization competition in semiconductor technology, the United States has been addicted to the strategy of "forming alliances" and "grouping". Before the "US-Japan Chip Alliance", it has successively vacated the "Semiconductor Alliance of America (SIAC)", "Indo-Pacific Economic Framework (IPEF)", "Chip4 Alliance" and "MitreEngenuity Alliance", and announced that it will launch the "Indo-Pacific Economic Framework" in the near future.

Behind these measures, the ambition of the United States is also obvious, that is, to promote the return of semiconductor manufacturing, consolidate the industry's dominant position in all aspects through its own influence, and curb the rise and competition of emerging semiconductor powers. Relatively speaking, Japan's purpose in the new alliance is a little "simple". However, with the evolution of international politics and the competitive landscape of semiconductor technology, the "US-Japan chip alliance" is facing many severe challenges, and to a certain extent reflects the loss of hegemony, and "America First" is also fading.

The old enemies rebuilt the "Qin-Jin friendship"

In recent months, as the conflict between Russia and Ukraine continues and the international semiconductor industry competition becomes increasingly fierce, the global energy and technology industry landscape is undergoing a certain degree of reconstruction under the influence of geopolitics, industrial development and technological iteration. Against this background, Japanese politicians responded to the "enthusiastic" call from across the ocean and came to the United States to complain about energy problems and pledge their allegiance.

Earlier in May, Japanese Minister of Economy, Trade and Industry Koichi Hagiuda visited Washington and pleaded with the US: If Japan follows the US and its European allies in immediately cutting off Russian oil imports, it will be in a difficult situation. But interestingly, according to data from the Japan External Trade Organization, Russian crude oil and liquefied natural gas accounted for 3.6% and 8.8% of Japan's total energy imports in 2021, respectively. Presumably, such a proportion is unlikely to "put Japan in a difficult situation."

On May 4th local time, U.S. Commerce Secretary Raimondo and Japanese Minister of Economy, Trade and Industry Koichi Hagiuda met. Source: Raimondo Twitter

On the same day, Hagiuda also met with U.S. Secretary of Commerce Gina Raimondo, and the two sides reached agreement on the basic principles of U.S.-Japan semiconductor industry cooperation, including promoting "diversification" of chip production capacity, enhancing "transparency", coordinating emergency measures to deal with chip shortages, and increasing research and development investment. Although this seems to be a "happy event", Hagiuda has mixed feelings.

"I feel the strangeness of fate when cooperating with the United States in the semiconductor field." He said this at a press conference after Japan and the United States reached a basic principle on semiconductor cooperation. The reason why Hagiuda Koichi used the word "strange" to describe it is because Japan and the United States had a history of fierce confrontation and feud over semiconductor issues in the past. For Japan, this is also the reason why its semiconductors are facing difficulties now.

1980年代后半期，日本半导体制造企业席卷全球市场，拥有超过50％的份额。索尼创始人和会长盛田昭夫等合著的《日本可以说“不”》一书中曾带着骄傲写道：不使用日本的半导体，弹道导弹就无法精确瞄准；如果日本不把半导体卖给美国而是卖给苏联，日本便有可能改变世界的权力平衡。由此，日本半导体的影响力“可见一斑”。

However, as the Japanese threat theory became more and more popular, the United States adopted anti-dumping duties, trade sanctions, signed the so-called "fair" "US-Japan Semiconductor Agreement", and supported the Korean semiconductor industry, which made the Japanese semiconductor industry, which was at its peak, fall into a slump and entered the "lost 30 years" of economy. Later, Japan had to retreat to the field of equipment and raw materials, but the United States was overtaken by South Korea and Taiwan in the semiconductor manufacturing link.

"The United States exerted pressure in a certain sense, and Japan later took the wrong path, which led to its decline", "Japan's semiconductors failed due to the challenges and ambitions of sweeping the world". Hagiuda Koichi reviewed the development of Japan's semiconductor industry at a press conference. Now, seeing the "olive branch" thrown by the United States, Japan seems to have seen a "correct" path, so it has rebuilt its friendship with this semiconductor enemy.

According to Japanese media reports, the establishment of the "US-Japan Chip Alliance" aims to catch up with Taiwanese and Korean companies in 2nm chip production, tackle the current hot chiplet technology in the industry, and ultimately lead the industry in more advanced semiconductor fields. Among them, Japanese companies and organizations including Tokyo Electron, Canon and the National Institute of Advanced Industrial Science and Technology are already developing manufacturing technologies for advanced production lines. In the United States, in addition to some semiconductor equipment manufacturers, IBM and Intel are expected to participate.

Image source: Nikkei Chinese website

Interestingly, the basic principles of semiconductor cooperation state that "open markets, transparency and free trade" are highly valued, and that "the common goal of Japan, the United States and other like-minded countries and regions is to improve supply chain resilience." However, due to the United States' confrontational attitude towards China and its efforts to strengthen protection of cutting-edge technology, this "basic principle" lists phrases that consider China. Thanks to the United States, China seems to have always been outside these circles, but it is "omnipresent."

"Dual Plot" under the Evolution of Strategic Interests

Why did the United States and Japan, once "old enemies" in the semiconductor field, come together? Hagiuda Koichi did not explain at the press conference. Perhaps, behind the silence is "there are no eternal enemies, only eternal interests."

However, while Japanese media described the cooperation between the two countries as the "safest" technological alliance, they also interpreted related questions to a certain extent, namely, the "US-Japan Chip Alliance" has two main purposes: First, the United States and Japan work together to overcome the research and development and mass production of 2nm advanced manufacturing processes, and get rid of the global chip advanced manufacturing process's dependence on South Korea and Taiwan, China; second, the US-Japan alliance will create a nearly closed semiconductor supply chain to prevent the leakage of core key technologies to mainland China.

One of the important reasons why the Japanese government took the initiative to cater to the US government is that TSMC has very strict management and confidentiality of chip manufacturing technology and will not build cutting-edge wafer foundries outside of Taiwan. Previously, in order to strengthen economic security, countries around the world have prepared huge subsidies and actively attracted TSMC to build factories in their countries in the past one or two years. However, TSMC did not agree, and decided to build the most advanced new semiconductor factories only in Taiwan.

Although the Japanese government introduced TSMC's factory in Kyushu, the semiconductor products produced are of a process of about 10-20nm and have low performance. In addition, the process planned for TSMC's US factory is 5nm, but the progress of the factory is not only very slow, spanning more than 4 years from planning to mass production, but also expected to lag behind the advanced process by two generations when it is mass-produced in 2024. This is completely different from the construction speed of TSMC's 5nm factory in Taiwan, China, which took less than 18 months.

It is true that TSMC built a wafer factory in Taiwan for many reasons, including convenience and advantages. However, one point that cannot be ignored is that the Taiwan authorities regard TSMC as a very valuable diplomatic bargaining chip and are very cautious in deciding to build new factories overseas. For example, a senior official in Taiwan once emphasized at an internal meeting that "high-tech industries such as semiconductors are the lifeline for the world to know Taiwan."