Japan to dangle as many Yen as it takes to lure chipmakers to its shores, because everyone else is doing it too

National growth strategy also prioritises low power distributed data centres

Japanese prime minister Yoshihide Suga has outlined a national growth strategy that will include doing whatever it takes to lure semiconductor manufacturers to the nation’s shores.

The strategy was introduced yesterday and stated that Japan will match investment attraction offers made by other nations, because it wants to secure the supply chain on which its many industrial giants rely. Japan’s also noticed that the likes of Taiwan’s TSMC are growing at quite a clip, so wouldn’t mind some of that action. TSMC is also important for Japan because it’s feasible that China will at some point physically interfere with Taiwan, which could disrupt supply. Many manufacturers are adopting a “China Plus One” strategy and Japan would not mind being that Plus One.

Suga also named “distributed placement of low consumption power data centers” as a technology Japan intends to pursue. Hyperscale data centres cost plenty to build and consume an awful lot of energy, which means they’re few and far between. Amazon Web Services has already started to build smaller data centres called “Local Zones” that it places closer to major population centres where users have latency-sensitive workloads but building full-scale data centres is not possible. Japan might be onto something here, especially as its heavy industrial giants know a thing or two about power distribution and generation.

Distributed data centres will also spread work around Japan, a handy outcome given another element of the plan addresses ensuring economic opportunity is spread beyond Japan’s large cities and industrial regions. Another element of the plan therefore calls for regulations that permit more freelance work, and work from home.

The growth strategy included elements of Suga’s plan to accelerate digitalisation of government services and the wider Japanese economy. One element of that policy is phasing out fax machines in favor of online services. Japan’s ardor for paper-based processes remains substantial: Fujitsu last week announced a new scan-to-email feature for one of its consumer-grade scanners and promoted it as offering the chance to “send emails from your home ScanSnap to your company's PC.”

Yesterday’s introduction of the strategy was a prelude to formal consideration by Japan’s cabinet in a fortnight. As the strategy includes some of Suga’s signature reforms, it should be well-received. Indeed, Suga’s posts about the plan suggest he expects discussions will quickly move from the merits of the Strategy to detailed implementation plans. ®

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