Semiconductors—silicon chips that can be as small as a button, yet are necessary for everything from microwaves to super computers—have been called the “new oil” of the 21st century. Japan had long been a global leader in semiconductor fabrication but fierce competition from neighboring countries, changing economic conditions, and the crash of the post-war economic bubble has altered the situation. In order to ensure mutual economic security and resilient supply chains in the Indo-Pacific and beyond, Japan has joined likeminded countries to forge a new future for one of the world’s most crucial technologies.

Japan, the US, and like-minded partners have made concrete efforts in cross-border collaboration, investments in facilities, stepping up technology security, and creating monetary support mechanisms. These efforts are in tandem with ancillary industry support, job incentive programs, and economic policy frameworks to ensure long-term stability. These new multi-faceted policies and large injections of public and private capital have transformed the way we produce, secure, and consume semiconductors and related equipment. With data-centric innovations like AI and cloud technologies becoming part of our daily life, the competition for chip supremacy amongst leading economies has become all the more heated.

As alliances form and semiconductor ecosystems come to fruition, the relevance is even greater for questions such as: how can nations effectively procure the valuable talent and rare natural resources necessary for the latest technological advancements? Moreover, how will government-led funds and new industrial policies shape a more resilient industry? And will global competition further contribute to a brighter future for semiconductors, or rather divide the globe into competing economic spheres?