Japan, Taiwan experts exchange views on chip industry in AI era

Taipei, Jan. 19 (CNA) Akira Amari, leader of Japan's parliamentary caucus for the strategic promotion of the semiconductor industry, said Japan envisions the arrival of Taiwan Semiconductor Manufacturing Co. (TSMC) reviving its semiconductor, while a semiconductor company chairman from Taiwan offered a more downbeat view, at a forum in Taipei on Thursday.

Amari, a ruling Liberal Democratic Party lawmaker, former head of Japan's Ministry of Economy, Trade and Industry, and a major force behind Taiwan's largest contract chip maker TSMC's arrival in Kumamoto, was invited to speak at the two-day CommonWealth Economic Forum in Taipei, which concluded on Thursday.

In the final panel featuring "opportunities and challenges of collaboration in Asia's semiconductor industry," Amari first talked about the revolutionary transformation that chips need to undertake in a generative artificial intelligence (AI) era.

Making chip power consumption more efficient is one possible route, according to the politician.

Data centers in Japan currently consume 2-3 percent of the country's power supply, he said, and it is estimated that by 2050 that will increase to 15 times the country's total electricity supply. Even if the chips reduce power consumption by 10 percent, the centers will still consume 1.5 times the total electricity supply.

Amari said the amount of data that generative AI processes and the consequent massive energy demand makes an all-encompassing application such as ChatGPT "an unsustainable business model."

He argued that the future of AI-driven semiconductor production rather lies in customized chips for language or industry-specific generative AI. "The production for each type will be smaller but the number of types will be large."

The Japanese lawmaker said countries with shared values and mutual trust, such as Taiwan, Japan, the U.S., and EU, can collaborate with their complementary strengths in the supply chain.

Inviting TSMC to Japan with a US$3.2 billion subsidy from the Japanese government for its first plant in Kumamoto was part of Japan's vision to rebuild the country's semiconductor reputation and secure the most advanced technology in the country, according to Amari.

However, Miin Chyou Wu (吳敏求), chairman and CEO of Macronix International Co., a world-class Taiwanese flash memory chip provider, was more pessimistic about the possibility of Japan becoming a major force in semiconductor production.

The production of integrated circuits was mastered by Asian countries, including Japan, in the early 1980s, with their more disciplined workers, while Americans have always taken the lead in innovation and design, Wu said.

As Japan started to lose its chip manufacturing lead in the late 1980s and with South Korea and Taiwan now accounting for the largest share of chip manufacturing, it is hard to imagine Japan will be able to outperform other Asian countries in terms of production or surpass the U.S. in innovation, the chairman said.

In response, Amari acknowledged Japan lags behind leading chipmaking countries, but still leads in materials and equipment.

"I agree that Japan should develop the industry further based on its existing strengths, but we also need to take into account the fact that we're witnessing a turning point in semiconductor technology," Amari said, suggesting that catching up at this critical juncture is essential.

Citing Intel CEO Pat Gelsinger's analogy comparing chips to oil in the 21st century, the Japanese politician said Japan cannot afford to be in the camp of semiconductor-receiving countries in a world that is divided into semiconductor suppliers and receivers.

Wu further highlighted the challenges Japan faces in terms of talent and corporate culture.

"Over the past few decades most of its (Japan's) top talent has chosen not to study electronics and electrical engineering due to the downturn in the semiconductor industry," Wu said, adding that the rigidity and slow decision-making of Japanese business culture could also be an obstacle preventing the country reviving its domestic chip industry.