[News] New Regulations Reportedly Introduced by Japan Regarding Semiconductor Exports

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According to a report from Nikkei News, Japan will require companies in critical industries such as semiconductor and machine tools to take measures to prevent cross-border technology leaks in order to receive government assistance.

The planned technology transfer rules will reportedly apply to five sectors: semiconductors, advanced electronic components, batteries, aircraft components, and machine tools and industrial robots.

The Ministry of Economy, Trade, and Industry (METI) will issue revised guidance regarding these sectors, which are part of the 12 critical materials designated by Japan under the Economic Security Act of 2022. This move aims to maintain Japan’s international competitiveness in advanced technology fields such as chip manufacturing materials and carbon fiber used in aircraft.

Companies applying for subsidies will first need to declare the “core technologies” they need protection for. The protective clauses of the METI will include measures to minimize the number of personnel involved in critical materials and require relevant staff to sign contracts committing not to take sensitive technology with them when they leave the company.

For companies that share technology with business partners, all parties must sign confidentiality agreements. They must also restrict the number of personnel involved in critical technology and monitor these employees.

For enterprises seeking to manufacture overseas or expand production of critical technology, they must consult with the METI in advance. This regulation is also aimed at avoiding dependence on such technology imports.

If a company producing advanced semiconductors wishes to increase overseas production by 5% or more, it must notify the ministry. For traditional semiconductors, increasing overseas production by more than 10% will trigger this requirement. Beneficiaries who violate the protective clauses may be required to repay subsidies.

Besides Japan, the US Department of Commerce also released details regarding its CHIPS and Science Act, which stipulates that beneficiaries of the act will be restricted in their investment activities—for more advanced and mature processes—in China, North Korea, Iran, and Russia for the next ten years.

The scope of restrictions in this updated legislation will be far more extensive than the previous export ban, further reducing the willingness of multinational semiconductor companies to invest in China for the next decade.

Read more

• [News] Strengthening Controls on Semiconductor Equipment Exports to China, Japan Reportedly Tightens Export Control Measures Further
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