Daily Management Review

Japan, US agree to secure semiconductor supplies amid shortages


Japan and the US have agreed to ensure the continued supply of semiconductors amid a global shortage that is affecting primarily automotive production.

The agreement was reached on Thursday following a telephone conversation between Japanese Minister of Economy, Trade and Industry Hiroshi Kajiyama and his US counterpart Gina Raimondo, the Japanese ministry said.

The two sides also discussed a number of international topics related to export controls, energy cooperation and combating environmental change.

Japanese automobile concerns faced a shortage of semiconductors at the beginning of this year. It is related to the dramatically increased demand for these products due to the adoption of fifth-generation systems for mobile communications in many countries. With the pandemic and the expansion of remote working schemes, the production of personal computers and games consoles also increased.

The problem was exacerbated by a fire at a Renesas Electronics plant in March, which accounts for 17% of the global chip market. Analysts of Nomura Securities consider that for this reason the world production of cars may decrease in April-June by about 7% or by 1,6 million. At the same time production of cars by Japanese companies will fall by 1,2 million.

source: reuters.com