Japan's government aims to secure a significant investment in its semiconductor industry by engaging in working-level talks with a fund linked to the government of the United Arab Emirates (UAE). The government seeks to strengthen collaboration with other countries to establish stable supply chains for semiconductors. It hopes that leveraging the UAE's financial resources will support the growth of Japanese companies in this sector.

UAE and Japan sign 23 new MoUs in trade, investment, energy, industry, health & technology sectors
UAE and Japan sign 23 new MoUs in trade, investment, energy, industry, health & technology sectors

The Economy, Trade and Industry Ministry will oversee the talks with Mubadala Investment Co., and funding is likely to be directed towards companies with advanced technologies for semiconductor material production and chipmaking equipment businesses. Specifics of the investment framework will be finalized at a later stage.

In the face of fierce international competition in semiconductor development, Japan is actively engaging in joint research and development of microchips with the United States and Britain. Additionally, it is establishing a framework to share information with the European Union to mitigate any potential disruptions caused by shortages of crucial materials.

To secure funds for semiconductor development, Japan's government has turned its attention to the Middle East. Rapidus Corp., a company established in 2022 under a Japanese government-led initiative, aims to mass-produce advanced semiconductors of the 2-nanometer generation starting in 2027. The development of this technology is estimated to require investments of ¥2 trillion, while preparing mass-production lines will require around ¥3 trillion.

During his visit to the Middle East in July, Prime Minister Fumio Kishida met with UAE President Mohamed bin Zayed, and both leaders agreed to enhance cooperation in the semiconductor field. Japanese industry ministry officials believe that if Middle Eastern nations can utilize their abundant financial resources to support Japanese businesses, it will further strengthen semiconductor supply chains.

The Japanese government's increased focus on the Middle East also stems from its concerns over China's growing presence in the region in recent years. Beijing has been exhibiting hegemonic behavior in the East China and South China seas, leading Japan to view China's emergence as a potential economic security threat. Japan aims to establish a foothold in the Middle East to redirect investment from China to Japan.