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Tag Archives: Japan

Charts: Japan Real Wage YoY Fell in October 2022

Down continuously for 7 months.

Source : Nikkei, Bloomberg and Twitter

Chart: Japan Imports 95% of the Crude Oil Needed from the Middle East

Type of energy source

Source : Nikkei

Japan’s Strategy to Revive the Semiconductor Industry

Read more at 経済産業省

次世代半導体の設計・製造基盤確立に向けて . . . . .

Japan Births at New Low as Population Shrinks and Ages

Mari Yamaguchi wrote . . . . . . . . .

The number of babies born in Japan this year is below last year’s record low in what the the top government spokesman described as a “critical situation.”

Chief Cabinet Secretary Hirokazu Matsuno promised comprehensive measures to encourage more marriages and births.

The total of 599,636 Japanese born in January-September was 4.9% below last year’s figure, suggesting the number of births in all of 2022 might fall below last year’s record low of 811,000 babies, he said.

Japan is the world’s third biggest economy but living costs are high and wage increases have been slow. The conservative government has lagged on making society more inclusive for children, women and minorities.

So far, the government’s efforts to encourage people to have more babies have had limited impact despite payments of subsidies for pregnancy, childbirth and child care.

“The pace is even slower than last year … I understand that it is a critical situation,” Matsuno said.

Many younger Japanese have balked at marrying or having families, discouraged by bleak job prospects, onerous commutes and corporate cultures incompatible with having both parents work.

The number of births has been falling since 1973, when it peaked at about 2.1 million. It’s projected to fall to 740,000 in 2040.

Japan’s population of more than 125 million has been declining for 14 years and is projected to fall to 86.7 million by 2060. A shrinking and aging population has huge implications for the economy and for national security as the country fortifies its military to counter China’s increasingly assertive territorial ambitions.

A government-commissioned panel submitted a report to Prime Minister Fumio Kishida last week citing the low birth rate and falling population as factors that might erode Japan’s national strength.

Source : AP

Charts: Inflation in Japan’s Capital Surges in November 2022

Source : Nikkei

Read more at Reuters

Consumer inflation in Japan’s capital rises at fastest pace in 40 years . . . . .

New Japanese Chipmaker Rapidus Joins Development and Investment Race

Yuki Yamaguchi wrote . . . . . . . . .

New Japanese chip production company Rapidus is facing daunting challenges as it tries to catch up with Asian rivals in the technology development and investment race, leaving a shaky outlook for the country as it attempts to revive its once-thriving industry.

Created by Toyota Motor, Sony Group and six other major Japanese companies with a total investment of ¥7.3 billion ($52 million), the next-generation semiconductor venture plans to mass-produce chips with state-of-the-art 2-nanometer technology in Japan in 2027. Such advanced chips can be used for 5G communications, quantum computing, data centers, self-driving vehicles and digital smart cities.

SoftBank and NTT are also among the participants in the project, along with Kioxia, Denso, NEC and MUFG Bank.

The Ministry of Economy, Trade and Industry will provide ¥70 billion in subsidies as part of its semiconductor strategy compiled last year.

The government sees domestic chip production as critical to its economic security, as dependence on major supplier Taiwan poses geopolitical risks amid rising tensions between the United States and China over the self-ruled island. A potential crisis in the region could lead to Japan losing access to semiconductor supplies.

Rapidus focuses on foundry operations representing a group of private-sector entities, while the government-backed Leading-edge Semiconductor Technology Center will serve as a research and development hub in cooperation with the United States.

This latest effort follows the country’s failure to keep up in the investment race over the miniaturization of semiconductors that resulted in a yearslong development hiatus in the 2010s.

Taiwan Semiconductor Manufacturing, a world leader in chipmaking, plans to mass-produce 2-nanometer chips in 2025, while Samsung Electronics succeeded in mass production of 3-nanometer semiconductors in June. In contrast, the latest technology in Japan can only produce 40-nanometer chips.

Analysts are skeptical about the immediate success of the new company amid stiff global competition. The state financial support of ¥70 billion, compared with the much larger assistance of $52.7 billion set out by the U.S. government, raises questions about how committed the Japanese government is to reviving the chip industry. The European Union and the private sector will also offer assistance of €43 billion ($45 billion).

Hideki Yasuda, a senior analyst at Toyo Securities, said the ¥70 billion is “not enough at all” for the new company to be competitive in the global market.

“Around ¥1 trillion of annual investment is necessary for the chip industry,” Yasuda said. “It’s hard to force private companies to bear such a cost. So the question is whether the Japanese government is prepared to do that.”

Rapidus Chairman Tetsuro Higashi said at a news conference last Friday he believes the industry ministry is aware that long-term financial support is necessary and hopes more support will be provided to help his company build a chip plant.

The government’s financial aid should at least match the amounts offered by other countries for Japanese companies to stay competitive, Mitsuhiro Osawa, senior analyst at Ichiyoshi Research Institute, said.

Japanese chip manufacturers were once dominant players, taking half the global share in the late 1980s. But they came under pressure when frictions over trade with the United States led to export restrictions that allowed South Korean and Taiwanese chipmakers to make deeper inroads.

Spending by Asian rivals outpaced that of flagging Japanese companies in an industry where the development and mass production of cutting-edge products determines competitive advantage.

Japan has striven to rejuvenate its semiconductor sector through government initiatives over the past decades. In 2006, Toshiba, Hitachi and Renesas Technology set up a planning company for a government-backed joint foundry, but the project fell apart six months later.

Elpida Memory, established through the merger of chip operations at Hitachi, NEC and Mitsubishi Electric, filed for bankruptcy protection in 2012 despite government aid of ¥30 billion.

Rapidus President Atsuyoshi Koike, a former engineer in Hitachi’s chip division and former president at the Japan unit of Western Digital, says he has learned lessons from the past.

“In the past, Japan tried to seek solutions only in a closed world,” Koike told reporters last Friday. “We will collaborate with people and companies worldwide, including raw material companies and chipmaking equipment makers.”

Rapidus is looking for more partners, including from overseas. The company, for example, is in talks with IBM over technology cooperation on 2-nanometer chips.

The technological vacuum of the past decade has allowed talented personnel to be recruited by rivals out of the country. Rapidus may find it difficult to look for skilled engineers and plant workers anytime soon in Japan, Masahiko Ishino, chief analyst at Tokai Tokyo Research Institute, said.

Japanese companies trying to catch up with global competitors are “like a high school student, who did not study at all in school, trying to get into the University of Tokyo,” Ichiyoshi Research’s Osawa said, referring to the most prestigious institution of higher education in Japan.

“The bar is extremely high” for Rapidus, which has no prior experience in mass-producing state-of-the-art semiconductors, to make 2-nanometer chips, Toyo Securities’ Yasuda said.

Source : Japan Times

Read more at 経済産業省

次世代半導体の設計・製造基盤確立に向けて . . . . .

Chart: The Japanese Economy Contracted 1.2% on an Annualized Basis During Q3 2022

Missing market forecasts of a 1.1% growth

Source : Trading Economics

Charts: Interest Rate Increase Posed Risk to High Japan Housing Loan

Source : Nikkei

Charts: Japan Consumer Prices Rose 3.0% in September 2022

Excluding the impact of the consumption tax hike, it was the first increase in 31 years and one month since August 1991.

Source : Nikkei

Charts: Effect of Zero China on Japan Manufacturing

Source : Nikkei