【Article/Observer Network Columnist Chen Yan】
After the end of World War II in 1945, with the revival of the Japanese economy, Japan made extensive use of the Us market and exported a large number of products to the United States, and the Trade War between Japan and the United States immediately began.
In the 1960s, Japanese textiles entered the U.S. market in a big way, and "Made in Japan" shirts for one dollar swept the United States.
In the 1970s, Japanese steel began to export to the United States in large quantities, leaving the U.S. steel companies known for their military industry powerless; after the 1980s, Japanese home appliances flooded the U.S. market; in the 1990s, Japanese cars took advantage of the chase.
In the Trade War between Japan and the United States, Japan seems invincible.
But there are exceptions, and that is semiconductors.
In the 1980s, when Japanese home appliances entered the US market in a big way, Japanese semiconductors occupied half of the world semiconductor market. In March 2021, when the Ministry of Economy, Trade and Industry announced the direction of Japan's "Semiconductor and Digital Industry Strategy", it came up with the following table at the relevant meeting:
According to the figures given by the Ministry of Economy, Trade and Industry, Japan accounted for 50.3% of the world semiconductor market in 1988. In 1992, Japan occupied 6 seats among the world's top 10 companies, namely NEC (2nd), Toshiba (3rd), Hitachi (5th), Fujitsu (7th), Mitsubishi (8th), and Panasonic (10th).
But twenty years later, in 2019, Japan's market share barely maintained at 10%, and in the same year, only Toshiba's subsidiary Kioxia remained in the 9th place, maintaining Japan's reputation.
According to the Ministry of Economy, Trade and Industry, if no effort is made, "Japan's market share will be almost zero in the future." (Japan's market share in 2030 is almost at a close level).)
Fortunately, on October 14, 2021, Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) jumped out and announced its policy of building a factory in Japan when it released its 2021 quarterly final results.
The Japanese media was overjoyed, feeling that there was finally a "Prince Charming" to save Japanese semiconductors from the crisis. TSMC's move also alludes to the kishida cabinet's need to pay special attention to "economic security", and the Japanese semiconductor industry has finally ushered in a day of raising its eyebrows.
Why does Japan's textiles, steel, home appliances, and automobiles still maintain a certain influence in the world market where you sang about it, while semiconductors are declining day by day, from half of the country in 1988 to "a corner" in 2019? Can TSMC save Japan's semiconductor industry? Will "economic security" revive Japanese industries or lose them more quickly?
Across the sea, watching the excitement of the Japanese media, listening to politicians' unforgettable hate speech against China in the House of Representatives election, searching for various opinions in the Japanese media, but almost not feeling the sense of chicken blood generated by the arrival of TSMC in the semiconductor industry.
The general feeling is that the production of semiconductors in Japan may be able to go up, but the Japanese semiconductor industry may completely bid farewell to this industry due to the arrival of TSMC, and the final result will be regrettable.
How different semiconductors are from home appliances and automobiles
In terms of production methods, semiconductors are very different from home appliances and automobiles.
The production of semiconductors adopts a horizontal division of labor, and wafers, scribes, plastic seals and finished product tests are carried out in collaboration between different countries and different companies, which is very different from the "series" production method familiar to Japanese companies.
In Japan, I have done a lot of research on companies related to home appliances and automobiles. I know that under the assembly companies such as Panasonic or Toyota Motor, there are countless parts suppliers. Japanese parts suppliers are often only attached to a certain assembly company, and a series is formed under the assembly enterprise; product design, trial production, formal production, improvement, new product design, improvement of business operations, etc., are carried out within the series. The development of assembly enterprises has led to the common development of a series of enterprises, as long as they can keep up with the pace of assembly enterprises, they can have food and room for development.
Between series and series, for example, the integrated motor companies in Japan include Sony, Hitachi Manufacturing, Panasonic, Mitsubishi Electric, Fujitsu, Canon, Toshiba, Nippon Electric (NEC), Sharp (now a subsidiary of Taiwanese company Hon Hai), Ricoh and so on. In terms of automobiles, there are Suzuki, Isuzu, Daihatsu, Toyota, Nissan, Hino, Honda, Mazda, Mitsubishi Motors and so on. Each company may not have its own series, but it is certain that under each company, there are relatively stable parts suppliers, and they have close business contacts with each other.
The final assembly company and the final assembly company have roughly the same products (the same production of television or automobile), and face the domestic and foreign markets together, which requires fierce competition in product development and business management between each other. Although this kind of competition is not fatal, the existence of competition allows Japanese companies to focus on series, continuously improve production efficiency, develop better products, and strive to expand domestic and foreign markets.
It can be said that the series of production methods, characterized by vertical management, is the main reason why Japanese companies have dominated the world for a while in the home appliance and automotive industries.
In the first stage of semiconductors, whether it is CPU (central processing unit) or DRAM (dynamic random access memory), Japanese companies are very powerful. After entering the 2000s, although Japan has been quite decaying in semiconductors, it still has a market share of about 30%, which is not backward.
But the world is constantly evolving and changing. It was found that after 2000, mobile communication suddenly became the focus of the industry.
I used a Sony phone in Japan, then replaced it with a Panasonic phone, and after returning to China, I bought a Sharp phone, interviewed a NEC phone, and wrote thousands of words of manuscripts. The author feels that the performance quality of Japanese mobile phones in the decade from 2000 to 2010 is quite good, and most of the mobile phones used by the author in that decade were clamshell type, slowly moving from 2G (the second generation) to 3G; but after 2010, there was basically no more touching Japanese mobile phones, and it was rare to see Japanese brand mobile phones in stores.
Looking at the map of the Ministry of Economy, Trade and Industry, around 2010, the proportion of Japanese semiconductors in the world fell by half, about 15%. It can be said that Japan's backwardness in mobile phones and other aspects has hindered Japan's research and development and production in the field of semiconductors, or that Japan has used a series of production methods of home appliances and automobiles to develop and produce mobile phones and engage in semiconductor production, resulting in its semiconductor industry gradually lagging behind other countries.
The emergence of foundry is not only apple mobile phones produced by foundry, but also the foundry of semiconductor parts. Using the horizontal division of labor, each country and each enterprise take out their own optimal resources to participate in the design and production of semiconductors, the number of products produced is more huge, the product itself is more refined, and it can be closer to the needs of users.
Under the vertical production mode, the best products are only produced for the same series of enterprises, and this model begins to be old, and the parts cannot keep up with the customer needs that have been iterated for years or months such as mobile phones. Not only did Japan's mobile phones begin to lag seriously behind, Japanese computer companies have abandoned related production, and the 3G period can also have a foothold in the forest of the world, but in the 4G era, Japanese companies are almost gone. The Japanese semiconductor industry has declined due to the lack of rapid transformation.
Mr. Died First, and Japan's investment in equipment in the semiconductor field was seriously lagging behind
The change in semiconductor production methods from vertical to horizontal is decisive for the industry; it is also necessary to see that the semiconductor industry itself needs long-term large-scale investment, while Japan's investment is basically the factory invested in the 70s and 80s of the last century, and although there are technological upgrades after that, the gap with the world is very large.
In semiconductor products, semiconductors in control, processing, and calculus processing are usually referred to as logic semiconductors. This is the core component of digital machinery such as computers, computers, and mobile phones. Logic semiconductors are also used for data storage, hence the term memory semiconductors.
In the decade after 2010, the production capacity of logic semiconductors has changed dramatically. With the deepening of digitalization, smart phones, 5G, etc. began to use 5-16 nanometers of high-end logic semiconductor parts, automobiles, industrial machinery and home appliances use 20-40 nanometers of mid-range semiconductors, semiconductors above 40 nanometers can only be classified into the road goods, there is almost no profit to earn.
After the relevant meetings of the Ministry of Economy, Trade and Industry have been held in March 2021, the meeting materials will be published online. According to public information, Japan's semiconductor factories were not only established early (Renesas' Kumamoto-Kawajiri factory was built in 1969, and the latest Naka factory was also built in 1984), but also most of the products were between 40-130 nanometers (Renesas' Nake factory produced 40 nanometer products, while Toshiba's Iwate factory was still producing 130 nanometer products), even if 40 nanometers could barely get close to the mid-range products, it was also the lowest-end of the mid-range, and products above 40 nanometers were almost only lost.
The Japanese state continued to inject blood into these factories, hoping to reorganize the semiconductor industry through mergers, but ultimately failed.
Compare the situation in Japan and Taiwan in 2009-2019: in 2009, Japan and Taiwan basically produced low-end logic semiconductors; in 2019, Japan's products have hardly changed in output, and the production of mid-end products has only increased slightly, while in the same time period, Taiwan's low-end production is increasing, and the total amount of mid-end products increased is much more than that of low-end products, and high-end products are more prominent, and the total amount has already exceeded low-end products.
Source: Ibid
After 2009, first in 2011, Japan suffered the worst earthquake and nuclear power accident in history, and after 2012, it entered the Abe Shinzo administration, and the foreign and military policies of openly using China as an enemy enabled the Japanese people to achieve a rare external ideological unification (on October 21, 2021, the opinion poll conducted by the Japanese speech NPO showed that 90.9% of the respondents did not have a good feeling or a good impression of China). Too many Japanese people pay too much attention to their neighbors and have little affection for their neighbors, which coincides with a period when Japan least valued investment, especially in cutting-edge technology.
Abe's eight years and Abe's puppet Yoshihide Suga's one year in power not only reduced Japan's GDP by 20% compared with nine years ago, but also reduced people's incomes by 30%, but also made Japan's huge regression in cutting-edge technology, especially in semiconductors. The "Abenomics" that some Public Opinions in Japan have praised is such a situation from the results of economic data.
According to the IMF, the Abe regime reduced the per capita GDP of the Japanese population by 30.5% over eight years.
Japan's prosperity in the semiconductor industry 20 years ago became the death of Mr. First, and by 2021, Japan can only re-evaluate TSMC, and even look forward to relying on the power of TSMC to bring Japanese semiconductors back to life.
TSMC's investment plan is related to the world's semiconductor overcapacity in 2024
According to TSMC's 2021 quarterly results released online on October 14, the company will start investing 1 trillion yen (about $10 billion) in Kiyocho, Kumamoto Prefecture, to build a plant to produce 22-28 nanometer semiconductor products. Japanese media believe that of the total investment of 1 trillion yen, the Japanese government will contribute 500 billion yen. The plant will be officially opened in 2024.
The author checked the situation of TSMC, the company currently has a 3-nanometer factory in Taiwan, will build a 7-nanometer factory in the United States, and has a 12-nanometer factory in the Chinese mainland. The Observer Network reported on October 18 that TSMC's situation in the United States covers an area of 1,100 acres (about 4.452 million square meters) in Arizona, and as for the construction of this plant, "the factory, which is planned for one and a half years and started for six months, seems to be still in the early stages of construction, and the subsidies promised by the US government to TSMC have not yet been implemented." ”
It is estimated that the situation in Japanese factories will be much better than in the United States.
First of all, after Kishida took office as president of the Liberal Democratic Party in September, he immediately appointed Gan Liming, an anti-China vanguard, as the party's secretary general, and after the formation of the cabinet, he specially set up a minister of economic security, and concretely implemented Abe's policy of hostility to China in party affairs and administration. Ganli attaches the most importance to semiconductors, hoping to establish a new semiconductor supply chain in Japan, and to restrain other countries through Japan's technological power and stand in an invincible position. With such a politician, there should not be too much of a problem in financial support.
As for the Japanese government's huge amount of money to fund TSMC to set up a factory in Japan, is the use of funds in line with international business practices? Those Who are accustomed to government subsidies, have not carried out decent technological innovation and production equipment updates for twenty years, and watch 500 billion yen of funds flow into TSMC, and TSMC's factories in Japan will fully replace Japanese companies, so that Japan's own semiconductor industry will be further lost, how will Japanese companies fight back?
I won't do too much analysis here for the time being, but there are two uncertainties that need to be pointed out.
First, after TSMC goes to Japan to build a 22-28 nanometer factory, it should plan to go further after starting in 2024 and engage in the production of 7-12 nanometer products.
At present, Japan only has a factory with a maximum of 40 nanometers, which cannot enter the 7 nanometer or even 3 nanometer stage in one step, and requires an intermediate process of 22-28 nanometers. But more importantly, the 22-28 nanometer and TSMC factories on the island of Taiwan, the future Arizona plant and the factory in Nanjing do not pose a threat, it should be said that it just fills the demand of the automobile, home appliances and other industries.
Japan does not have a decent smartphone, nor does it have the relevant demand for parts, but if Japan also enters the production of 7-12 nano products, although TSMC will adjust production, the international community also has sufficient market space to accommodate products of this scale, but the Nanjing factory, which has long been depreciated, and the American factory that started earlier than the Japanese factory, the price of its products will inevitably be much lower than that of the Japanese factory.
Does the Japanese factory have a price advantage? Can the construction of Japan's industrial chain coveted by Japanese politicians such as Ganli be realized? These will be very important issues.
Second, the author would like to ask whether TSMC will transfer some semiconductor technology to Japan and revitalize the Japanese semiconductor industry?
Japan is an important provider of semiconductor raw materials and semiconductor production line equipment, but it is not possible to build a complete semiconductor supply chain in Japan, and Japanese companies are only providers of important materials and equipment in the supply chain. The change in this situation either requires a world market like TSMC, a comprehensive grasp of relevant technologies, production know-how, and market demand, or a country with a large population like the United States and China, with strong industrial demand, and by building a supply chain in the country, it can grasp a kind of ability to influence the world market while meeting domestic demand - in the words that Japanese politicians like to say, maintain a certain economic security force.
Japan's 100 million people, almost no decent mobile phones, computers, 5G industry, the domestic market is limited, economic security requires Japanese companies not to sell important semiconductor products to China, the goal of Japanese politicians' action should be the biggest uncertainty that Japanese semiconductors may encounter.
epilogue
Many times people prefer to blame the decline of Japan's semiconductor industry on the Japan-US semiconductor negotiations and the US crackdown on Japanese companies.
In fact, after entering 2000, the Trade War between Japan and the United States is not the main theme of these two countries, it is Japan that has voluntarily given up investment in the semiconductor industry, has not carried out related technological and business innovations, and has taken the initiative to give up its progress in mobile phones, computers, 5G base stations and other industries.
After more than two decades of loss in semiconductor and other industries, TSMC's intervention will neither transfer technology to Japan nor save Japanese semiconductors from crisis. The overcapacity crisis in the semiconductor industry around 2024 may become the last straw that completely overwhelms the Japanese semiconductor industry.
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