Japan Should Focus on Niche Strengths in Chip Revival, Says NTT Chairman
Japan must take a targeted approach to semiconductor manufacturing rather than attempting to compete on cost and scale, NTT Chairman Jun Sawada told Reuters in an interview. He said Japan’s success lies in producing specialised, high-quality chips instead of replicating the large-scale, low-cost strategies of global giants.
Niche Over Scale
Sawada explained that NTT’s investment in Rapidus—a government-backed chipmaker aiming for mass production of advanced semiconductors by 2027—reflects this strategic vision. “That’s why we supported investment in Rapidus—because they aim for low-volume, high-quality production,” he said. “Competing on low-cost, mass production has led to failure before. We’ve lost that battle. Scale advantages dominate globally—TSMC leads, and Samsung dominates memory. Japan can’t win there.”
Rapidus was established in 2022 as part of Japan’s $65 billion plan to strengthen its semiconductor and artificial intelligence sectors. The initiative has attracted significant financial backing, with Japan’s three largest banks preparing to lend around 2 trillion yen ($12.9 billion) to the company.
Learning from Past Lessons
In the 1980s, Japan was among the world’s top semiconductor producers but gradually lost ground to Taiwan and South Korea. Sawada emphasised that Japan’s earlier pursuit of cost competitiveness undermined its technological strengths. He argued that this time, Japan should build a future on advanced, niche manufacturing capabilities rather than mass production.
NTT hopes Rapidus will integrate its Innovative Optical and Wireless Network (IOWN) technology, which uses light to transmit data faster and more efficiently than conventional methods. This could give Japan’s semiconductor industry a technological edge in an increasingly competitive global landscape.
Opportunities Amid U.S. Policy Shifts
Sawada also addressed Japan’s growing investment in the United States amid shifting trade dynamics. Referring to Japan’s pledge to invest 85 trillion yen ($550 billion) in the U.S., he said the initiative presents both challenges and opportunities. “If we take it positively, even though tariffs have risen, Japan is being allowed to enter and capture U.S. market share. It’s a two-way street, with both positive and negative aspects,” he said.
He added that how individual companies respond to these developments will determine their long-term success. “How companies position themselves and act will differ, and that will create significant differences,” he said.
with inputs from Reuters