EU and Japan announce Digital Partnership to strengthen chip supply chain

The European Union (EU) and Japan have joined forces to monitor the global chip supply chain and support Japanese semiconductor companies operating within the EU. EU Commissioner Thierry Breton emphasized the importance of securing the semiconductor supply chain, stating that reducing dependence on China-made technology, including chips, is part of the EU’s strategy to mitigate risks.

During the first EU-Japan Digital Partnership ministerial talks, the two parties agreed to collaborate on various areas, including undersea cable connectivity, research and supply chain resilience for chips, investment in quantum and high-performance computing (HPC), and AI regulation. Commissioner Breton also met with government ministers from South Korea to discuss similar topics, indicating a broader collaboration among G20 members.

The semiconductor industry has become strategically significant in the trade conflicts involving Western-allied nations and China. The US has sought the EU’s support in limiting China’s access to advanced semiconductors and related manufacturing equipment.

Both Japan and the EU have recently prioritized strengthening their domestic semiconductor industries. The European Council and the European Parliament agreed to invest $3.6 billion in EU funds to enhance semiconductor manufacturing capabilities, aiming to attract an additional $43.7 billion in private investments. This initiative aims to avoid bottlenecks in the global semiconductor supply chain. Japan, on the other hand, announced a $532 million investment for the development and production of next-generation chips, including a partnership with Rapidus to manufacture 2nm chips in Japan by 2025.

Moreover, Japanese semiconductor equipment maker JSR accepted a buyout offer of $6.4 billion from the Japanese government. This acquisition provides Japan with greater control over the manufacturing of photoresists, the chemicals used in the chip printing process.

The collaboration between the EU and Japan in monitoring the chip supply chain and supporting domestic semiconductor industries reflects their shared commitment to ensuring supply chain resilience and reducing reliance on specific regions, particularly China.