Text / Modern Logistics News all-media reporter Chang Heshan
On April 26, the Japanese government announced that it intends to implement export controls on related items in semiconductors and other fields, and solicited public comments on relevant measures.
On April 29, according to the website of the Ministry of Commerce, the spokesperson of the Ministry of Commerce pointed out in response to a reporter's question that China urges the Japanese side to proceed from the overall situation of bilateral economic and trade relations, correct its wrong practices in a timely manner, and jointly maintain the stability of global industrial and supply chains, and China will take necessary measures to resolutely safeguard the legitimate rights and interests of enterprises.
(Image source: Xinhuanet)
The spokesman of the Ministry of Commerce said that semiconductor is a highly globalized industry, and after decades of development, it has formed an industrial pattern, which is the result of the combined effect of market rules and enterprise choices. For a period of time, some countries have frequently generalized the concept of national security, abused export control measures, artificially fragmented the global semiconductor market, seriously deviated from the principles of free trade and multilateral trade rules, and seriously impacted the stability of global industrial and supply chains. The relevant measures proposed by the Japanese side will seriously affect the normal trade between Chinese and Japanese enterprises, harm others and themselves, and also undermine the stability of the global supply chain.
On-chain shocks
According to the data, in July 2023, Japan's exports of electronic components such as semiconductors to China fell by 16.8% year-on-year. At the same time, imports of semiconductors and other electronic components from China decreased by 28.2% compared to the same period of the previous year.
In March 2024, Japan's exports of semiconductor equipment to China surged by 82.4% year-on-year, showing a strong export growth trend.
Financial commentator Guo Shiliang told a reporter from Modern Logistics News that from the perspective of the distribution of global semiconductor companies, the United States will account for 13 in the list of TOP25 semiconductor companies in 2023, and TSMC is also among them. Europe, South Korea, and Japan each occupy some seats, and the United States still occupies a leading position in the semiconductor industry.
Tan Haojun, an adjunct professor at Zhongnan University of Economics and Law, said in an interview with a reporter from Modern Logistics News that some Western countries, including Japan, have adopted a lot of trade and technical protection measures in the field of semiconductors for their own selfishness, even ignoring the rules of the international market and trade rules, resulting in many breakpoints in the supply chain of the international semiconductor market and the incompleteness of the international semiconductor market.
(Image source: Toshiba official website)
Economist Yu Fenghui told the Modern Logistics Daily reporter that the semiconductor industry chain has the characteristics of a high degree of globalization and fine division of labor. It covers the entire process from raw material supply, design, manufacturing, packaging and testing to final product application, involving the cooperation of enterprises in multiple countries and regions.
Yu Fenghui said that the semiconductor international industry chain has several obvious characteristics:
One is interdependence. Enterprises from various countries play different roles in the industrial chain according to their own advantages, such as the United States is leading in chip design and high-end equipment, Japan is excellent in materials and precision equipment manufacturing, and China has a place in packaging and testing and some chip manufacturing.
Second, it is technology-intensive and rapid iteration. The semiconductor industry is a technology-intensive industry, and continuous R&D investment and technological innovation are its core competitiveness. The rapid upgrading of products and technologies requires close cooperation among all links in the industrial chain to quickly respond to market demand.
Third, it is capital intensive, and it takes huge investments to build and maintain semiconductor production lines, so capital flows and international cooperation are crucial.
Therefore, with rapid iteration and cross-border supply chains, products are often produced across multiple countries, and the interruption of any link will affect the efficiency and stability of the entire chain.
Where's the damage?
In Guo Shiliang's view, semiconductors are highly globalized industries, and Japan's regulatory actions will hurt the global process of semiconductors and are not conducive to the healthy development of semiconductors.
Tan Haojun said that Japanese companies could have gained a lot of room for development in the Chinese market, but the Japanese government's wrong decisions will affect the development and interests of Japanese companies in the Chinese market. Once China's own semiconductors are well developed, it will be very difficult for Japanese companies to enter the Chinese market. The fragmentation of the global semiconductor supply chain will not only affect Chinese companies, but also Japanese companies.
Yu believes that Japan's control measures hurt the global supply chain of semiconductors. As a major supplier of semiconductor materials and precision equipment, Japan's export controls will directly lead to shortages of materials and equipment in the global supply chain, increase costs, slow down production, and affect the production and supply of electronic products worldwide. Moreover, such behavior could trigger similar protectionist measures in other countries, exacerbating global trade tensions.
(Image source: Japan National Tourism Organization)
At the same time, Japan's control measures will also affect trade between Chinese and Japanese companies. For Chinese companies, Japan's export controls may make it more difficult to obtain key raw materials and production equipment, increase production costs, and affect production capacity and product delivery.
In the long run, it may force Chinese companies to find alternative suppliers, but this will take time and may not fully compensate for the differences in technology or quality. For Japanese companies, the loss of the Chinese market may lead to a decrease in orders, affecting their business growth and profits, creating a so-called "boomerang effect".
How to keep the chain
Tan Haojun said that with regard to the above-mentioned export control measures of the Japanese government, Tan Haojun said that we must first take corresponding countermeasures; second, China must continuously improve its ability to make independent innovations and breakthroughs in high-tech fields, especially in the field of semiconductors.
(Image source: Lianhe Zaobao)
Speaking of how to deal with the negative impact of Japan's control measures, Yu Fenghui said that the following aspects can be started:
The first is to strengthen independent research and development and domestic substitution. Increase investment in the semiconductor industry, especially in the research and development of key technologies and materials, reduce dependence on external suppliers, and improve the independent and controllable ability of the industrial chain.
The second is to build a diversified supply chain. Actively explore supply chain resources outside of Japan, including establishing partnerships with companies in other countries and regions, and building a more diversified and stable supply chain system.
Third, we need to strengthen international cooperation and dialogue. Through multilateral trade mechanisms and bilateral dialogue channels, we call on the international community to jointly oppose trade protectionism and maintain an open and fair trade environment. At the same time, it seeks to communicate with the Japanese side and strive to resolve differences on the basis of mutual benefit.
Fourth, increase policy support and market access. The government can introduce more incentive policies to support the development of domestic semiconductor enterprises, while optimizing the business environment and attracting foreign investment to participate in the construction of China's semiconductor industry chain.
Fifth, strengthen international cooperation in R&D projects. Participate in or initiate international scientific and technological cooperation projects, share R&D results, improve the overall technical level, and reduce the impact of technological blockade.