Press Conference by Minister Nishimura (Excerpt)

*Note: This is a provisional translation for reference purposes only.

10:04 to 10:24 a.m.
Tuesday, November 1, 2022
Press Conference Room, METI Main Building

Opening Remarks

Meeting to Discuss Power Supply and Demand/Winter Supply and Demand Measures

I would like to say one thing at the start.

Today, we held a meeting via remote participation to discuss power supply and demand. We have been implementing supply measures for this winter since the last meeting in June. As a result, we expect to secure a reserve rate of 3%, which is the minimum necessary for a stable supply. It is an improvement from the negative reserve rate we previously envisaged. However, given that the power supply and demand situation is still severe, we have decided on power supply and demand measures for the winter of FY2022.

We will steadily implement supply measures that include restarting idle power plants and procuring additional fuel. In addition, as measures to control demand, although there is no numerical target for power conservation following this summer, we ask everyone in the country to use energy efficiently and conserve it reasonably. We ask you to do so by, for example, wearing layers of clothes while lowering the room temperature, turning off the lights in rooms that aren't being used, and being careful not to use too much hot water.

In addition, as efforts to use energy efficiently and conserve it for this winter, we will implement support measures such as an energy conservation program with incentives in which households and companies that join and save even more energy will receive benefits from the government in addition to those from power companies.

Furthermore, as part of the comprehensive economic stimulus packages decided last weekend, METI will put several hundreds of billions of yen into bold energy conservation measures for companies and households intensively for the next three years. We will significantly expand energy conservation subsidies for companies, which are currently up to 1.5 billion yen. By making business operations feasible for multiple fiscal years, we will explore demand for investment by SMEs. We will also work with the Ministry of Land, Infrastructure, Transport and Tourism and the Ministry of the Environment to implement energy conservation measures for households, including support measures such as improving insulation for the entire house and providing highly efficient water heaters. The budgets of the respective ministries combined will exceed the hundreds of billions of yen that I mentioned earlier. Over the next three years, we will provide intensive support to make Japan more resilient against the energy crisis.

The administrative staff will explain the details later.

Question-and-Answer Session

Semiconductors

Q: My question is about the semiconductor policy. Prime Minister Kishida stated in a press conference the other day that 1.3 trillion yen will be budgeted for expanding investment into semiconductors nationwide, including the joint development of next-generation semiconductors by Japan and the United States. Until now, METI has granted subsidies to TSMC, KIOXIA, and Micron and encouraged investment. Please tell us if there are any new concrete projects that you have in mind. Also, at the US-Japan Economic 2+2 in July, Japan and the U.S. agreed to establish semiconductor research bases, and it was mentioned that more details would be announced this fall. Please tell us how it is progressing.

A: As you know, semiconductors are a key technology that is crucial to digitalization, decarbonization, and ensuring economic security. As the market is expected to grow significantly, major countries are spending large sums of money to support the semiconductor industry. The investment environment in Japan has improved significantly, partly due to the recent depreciation of the yen. Investment into Japan from overseas is also extremely efficient due to the depreciation of the yen. Japan should continue to provide assistance comparable to other countries because it will be extremely important from the viewpoints of strengthening industrial competitiveness and economic security. Furthermore, it will contribute to reforming the industrial structure, which is essential to the medium- to long-term development of Japan's economy.

As Prime Minister Kishida explained recently, the economic package includes a measure with a budget of 1.3 trillion yen, which is truly essential to realizing the semiconductor strategy, which METI has put forward. One part of that is promoting the joint development of technology between Japan and the U.S. for next-generation semiconductors, which you mentioned. Secondly, as you also pointed out, we will support the development of and investment in manufacturing bases for advanced semiconductors domestically. Third, we will support the enhancement of the resilience of highly essential semiconductor supply chains in their entirety, not only for semiconductor manufacturers but also parts and materials suppliers supporting them. These three areas are targets for the budget. It has yet to be decided who will receive this support as there will be discussions on supplementary budgets from now on. We will go through the necessary procedures to decide on effective support to obtain favorable results.

As for the semiconductor R&D base that you pointed out, we are currently coordinating with relevant organizations to launch the NSTC as soon as possible and establish a manufacturing base that can make next-generation semiconductors as small as two nanometers in the latter half of the 2020s. We will inform you of the establishment of necessary systems and the progress in technological development in the near future. We will use this budget effectively and provide solid support while working toward establishing the NSTC.

We will continue to make every effort to realize Japan's strategies for semiconductor and digital industries, including research and development of next-generation semiconductors.

U.S. Semiconductor Export Restrictions

Q: My question is related to the semiconductor policy. Last month, the United States announced measures to strengthen restrictions on semiconductor exports to China. How do you think this will impact semiconductor-related companies in Japan?

Also, how will Japan cooperate with the U.S., and will Japan introduce a similar export restriction with China in mind?

A: On October 7, the U.S. Department of Commerce announced that it will strengthen export restrictions on advanced semiconductors and manufacturing equipment to China. Of course, we have been communicating with the U.S. on the details and conducted interviews with Japanese companies based on that. We have not received any reports of any significant impact on Japanese companies.

On the other hand, we will continue to provide information and examine impacts while observing future operations of the U.S. authorities.

We have been implementing strict export controls based on the Foreign Exchange and Foreign Trade Act through international cooperation. We will continue to respond appropriately under this policy while considering regulatory trends in the U.S. and other countries.

Sakhalin-1/Requests to Save Energy

Q: This is about the transfer of Sakhalin-1 to the new company. Some media reported that the Japanese government has decided to participate in the new company, and the deadline for a response will expire this week. My first question is about the government's current policy on this project. My second question is about saving energy. What is the reason for requesting people to save energy even though the minimum necessary reserve rate of 3% has been secured? I would like to ask for your thoughts regarding the significance of this request.

A: First, regarding Sakhalin-1, we are currently dependent on the Middle East for more than 90%, around 95%, of our crude oil imports. Under these circumstances, Sakhalin-1 is a valuable supplier outside the Middle East, and I recognize that it is an extremely important project in terms of energy security.

We are currently confirming the specifics of the conditions and procedures related to Russia's presidential decree, but the Government of Japan has established a policy of maintaining interests in Sakhalin-I.

Yesterday, I had a meeting with Chairman Okubo, President Fujita, and other directors of SODECO, and I asked them to consider positively participating in the newly established Russian company while closely communicating with private shareholders.

We will continue to work together with the public and private sectors and respond while communicating with them closely for ensuring energy security.

To answer your question about saving energy, regarding the power supply and demand for the winter of FY2022, we are assuming that the temperatures will be the lowest in ten years. Based on this assumption, we have secured a reserve rate of 3%, the minimum necessary for a stable supply. The rate is as low as 4.1% in the Tohoku and Tokyo areas. The outlook remains critical.

In addition, there is a risk that the expected maximum power demand will be exceeded, and the current energy conditions may become even more severe depending on the international situation. With this in mind, we must prepare for the risk that we will not be able to secure fuel, and respond to it firmly. In order to ensure a stable power supply, we have called for cooperation in saving energy to a reasonable extent this winter, as we did this summer.

Again, we would be grateful if you cooperate in using energy efficiently and conserving it reasonably by, for example, wearing layers of clothes and lowering the room temperature, turning off the lights in rooms that aren't being used, or being careful not to use too much hot water.

Automobiles

Q: There are reports that there will be a meeting tomorrow between you, the Prime Minister, the president of Toyota Motor Corporation, Toyoda Akio, and other top management in the automotive industry. Please confirm the facts regarding this.

In addition, there are various issues in the automotive industry such as decarbonization and the development of new technologies including autonomous driving. Can you tell us about the aim of this meeting?

A: Together with Prime Minister Kishida and relevant ministers, I will exchange views on a wide range of issues with members of the Keidanren's Committee on Mobility, mainly about the automotive industry. The schedule is still being finalized, but I understand that it is to be held as early as tomorrow.

As you know, the automotive industry is said to be in the middle of a dramatic transformation that comes once in a century, involving DX and GX (digital and green transformation.) There are two sides to this. There is a sense of crisis, and at the same time a huge chance to pioneer a new age.

Against this backdrop, we will create an environment in which players are acting across industrial boundaries. I rode one of Toyota's autonomous vehicles in Silicon Valley. In Namie Town, Fukushima Prefecture, I rode a car using Nissan's car dispatch service. This service allows residents to request cars on demand with their smartphones. I think there are new possibilities and values for mobility being created according to each region and their circumstances.
I hope the upcoming discussions will be solid and lead to a mobility policy so that the public and private sectors will further expand these trends, and that the Japanese automobile industry will continue to lead the world amid the global trend toward decarbonization.

Q: I have a quick question. Do you plan to hold this meeting regularly, for instance, every year?

A: Because the situation regarding the progress of policies and transformation is changing quickly, I think rather than holding it regularly, we will observe the situation and hold meetings as needed.