*Note: This is a provisional translation for reference purposes only.
Tuesday, February 14, 2023
Press Conference Room, METI Main Building
Advanced Semiconductor Export Control
Q: I have a question about semiconductors. At the end of last month, it was reported that Japan, the United States, and the Netherlands agreed to restrict the export of semiconductor manufacturing equipment to China. However, overseas sales of Japanese manufacturing equipment in fiscal 2021 were the largest in China, accounting for 33% of total sales. In fact, wouldn't the Japanese semiconductor industry and the Japanese economy suffer disadvantages from participating in the export restrictions against China? Japan's semiconductor industry was the strongest in the 1980s and 1990s, but was crushed by the Japan-U.S. Semiconductor Agreement meant to weaken the Japanese semiconductor sector. I am concerned that by joining the U.S. strategy, participating in export restrictions with China would undermine Japan's national interests. Please tell us your thoughts.
A: I don't intend to present a lecture on the history of semiconductors here, but among the various issues facing Japan's private and public sectors, the lesson of our history is that what once accounted for 50% of the market has fallen to about 10%. I believe that we must formulate a new strategy based on a thorough examination and analysis of this.
There were many private companies that invested in closed, in-house development. Human resources were scattered and couldn't get large investments. Also, there was not much new R&D or innovation through open innovation and enlisting help of outside expertise. As you mentioned, considering the intention of the U.S. government, which was negative toward Japan's industrial policy at the time, the government has not supported large-scale investments. Based on those lessons and analyses, the government has prepared various support measures regarding advanced semiconductors, with investment into Rapidus Corporation for the most advanced semiconductors. We prepared support measures worth 1.3 trillion yen in last year's supplementary budget that will encourage investment into the private sector so we can compete with the global advanced semiconductor industry. It will be a huge investment that cannot be made by a single country or through a protectionist approach like in the past, but through cooperation among like-minded countries and through many innovations. Our policy is to work on advanced semiconductors in cooperation with the U.S. and European countries.
Under those circumstances, at present, Japan has not made decisions on any policy to strengthen export restrictions on semiconductor manufacturing equipment. Regarding the U.S. strengthening of its regulations, we have conducted hearings and such with companies in Japan about various impacts and other topics, but we have not received any reports a significant direct impact.
From the viewpoint of maintaining international peace and security, it is necessary to implement strict export controls in accordance with the Foreign Exchange and Foreign Trade Act.
In any case, we will take measures while closely communicating with like-minded countries.
Q: This is about this morning's ministerial meeting on economic security at the Prime Minister's residence. The Prime Minister has given instructions to start discussing the introduction of security clearances. Security clearances are not included in the laws promoting economic security, but there is talk of introducing them. What are your thoughts on their necessity? That is my first question.
My second question is if they are going to be introduced, the private sector will be very worried about how thorough investigation will be. Please tell us how you wish to explain them if they are to be introduced. Those are my two questions.
A: The discussions just have kicked off today. In the past, regarding security clearances, some have suggested that we should consider introducing them in a supplementary resolution in the Diet. I myself have heard voices from industry and have been communicating with like-minded countries. I feel that this security clearance system is necessary, and I will discuss it thoroughly with relevant ministries and agencies, mainly with Minister Takaichi.
I hear that a panel of experts will be established and their discussions will be taken into account. My remarks might have been recorded. We will listen closely to the needs and opinions of the private sector as you mentioned. Also, it is important to establish a mechanism for sharing a variety of information with like-minded countries based on a relationship of trust, so we will continue to engage in concrete discussions.