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Japan Once Led the World in Microchips. Now, It's Racing to Catch Up

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To increase its production of semiconductors, Japan is subsidizing the construction of an $8.7-billion plant in Kumamoto Prefecture.

Credit: Kyodo News/Getty Images

It was the spring of 2021, and demand for new cars was spiking. But, as consumers, flush with savings amassed during the pandemic, rushed to dealerships around the world, one Japanese automaker after another idled production as they waited for imports of a critical component: semiconductors.

Coronavirus outbreaks had shut down chip plants, and an unanticipated surge in demand for electronics from people riding out the pandemic at home had constrained supplies. Nissan alone predicted a cut in output of half a million vehicles.

The chip shortfall — a blow to "the head" of Japan's economy, in the words of Yoshihiro Seki, a lawmaker who leads a study group on semiconductors — woke up the country to the fragility of the supply chains that undergird its most important industries.

From The New York Times
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