Invest in Japan: Japan Takes Poll Position in Global Supply Chains

Global business leaders joined members from the Japan External Trade Organization (JETRO) on stage in New York on December 10 to discuss the current global state and outlook of Japan’s economy and investment landscape. The panel was part of the annual two-day Reuters Next conference that brings together more than 700 executives, academics, politicians and prominent thought leaders to examine a host of global trends and issues.

Joining moderator Del Irani were Chairman and CEO of JETRO Norihiko Ishiguro; Dr. Siva Sivaram, President and CEO of QuantumScape, a leader in solid-state lithium-metal batteries; Audrey Charles, SVP of corporate strategy at Lam Research, a supplier of cutting-edge wafer tech to the semiconductor sector; and Director-General Takeo Nakajima of JETRO’s Innovation Department.

Opening the session, Ishiguro contextualized Japan’s economic climate against a background of worldwide uncertainties: “Looking at the recent global situation, both trade and foreign direct investment have decreased. However, Japan is witnessing a dramatic recovery.”

After decades of deflation, the country is now experiencing inflation of around 2 percent, coupled with a consensus on the need for wage increases to sustain economic growth, essential in creating “a virtuous cycle,” emphasized Ishiguro.

“Japanese businesses have become very enthusiastic about M&A and open innovation to accelerate technological advances and strengthen their international competitiveness,” he added, noting a growing dynamism among Japanese corporations.

The rise of startups in deep-tech fields like AI and robotics was another positive trend he pointed to, alongside increasing labor mobility, which Ishiguro said is making it easier for companies to attract top talent.

“Japan’s political and economic stability, along with its safe living environment and advanced technology, continue to attract global interest,” continued Ishiguro.

Technological transformations such as AI and smart mobility will be driven by semiconductors, commented Charles of Lam Research, which has been operating in Japan for more than three decades.

“The semiconductor industry is forecast to hit $1 trillion in demand by 2030,” said Charles.

Highlighting the importance of customer proximity and innovation, she pointed to Lam Research’s approach of leveraging global ecosystems and Japan’s active role in advancing semiconductor technologies.

“Japan’s progress in recent years, including ventures like Rapidus focusing on two-nanometer logic chips, is truly exciting,” she added, referring to the new semiconductor manufacturer. “This is a very strong statement of support from the Japanese government. And while this is happening in multiple regions, what is really notable is the focus and the number of our global customers that have opened new fabs, new operations in Japan and deepened their partnerships in the region over the last couple of years.”

QuantumScape CEO Sivaram also hailed Rapidus as a sign of the commitment of Japan’s government and private sector, which are both backing the company, to being a leader in the chip space.

Like semiconductors, next-generation batteries will underpin advances in multiple industries and technologies, and are an area in which “Japan has been a strong player for a long time,” suggested Sivaram.

Explaining why QuantumScape chose Kyoto for its regional base in 2022, Sivaram cited the strength of local universities, and said the area is “where the large old battery manufacturing infrastructure exists,” adding, “Japan’s stable regulations, deep talent pool, and strong public-private partnerships make it an ideal environment for investment.”

In addition to investing in the region, QuantumScape is committed to helping build a robust ecosystem that supports the development of solid-state batteries in Japan. The company’s recent Solid-State Batteries Symposium in Kyoto convened leaders from across the solid-state battery space to discuss the role of solid-state battery technology in shaping the future of transportation, energy storage, and the broader battery industry in Japan and beyond.

Illustrating Japan’s increasing attractiveness for foreign investment, JETRO’s Nakajima shared data on recent growth: “Over the past ten years, FDI in Japan has surged from $140 billion to $340 billion - a 2.5-fold increase.”

Nakajima attributed this to geopolitical factors, such as the U.S.-China rivalry, and Japan’s robust infrastructure, citing the fact that, “Micron has announced over $3 billion in investment to increase Dynamic Random Access Memory (DRAM) production in its Hiroshima factory,” as evidence of the confidence global companies have in Japan.

The panel also explored broader opportunities in the Asia-Pacific region and beyond, with Charles pointing to Lam Research’s initiative to train 60,000 engineers in India using virtual tools as an example of the tech sector’s cross-border nature.

“It’s about fulfilling the talent and infrastructure needs to realize the semiconductor industry’s potential,” she said, adding, “This is a very global story.”

In terms of batteries, everything from the electrification of India’s huge two-wheel vehicle market to the global push for sovereign data centers are driving the sector forward, commented Sivaram

“We need next-generation battery technologies to meet these growing demands,” he stressed. “You can’t solve today’s problems with yesterday’s technologies.”

Looking ahead, Charles highlighted AI’s transformative potential: “We’re at the start of the AI era, and it will continue to shape global trends.”

She also emphasized automation’s role in addressing workforce challenges, mentioning Lam’s recent deployment of Dextro, the first collaborative robot for semiconductor maintenance.

“It’s about driving progress while addressing cost and talent gaps,” she continued.

Highlighting Japan’s evolving role in the global economy, the panel underlined its pivotal role in the wider Asia-Pacific region. As industries and governments navigate an era of transformation, cross-border collaboration and innovation will be key to shaping a sustainable and prosperous future.

Wrapping up the session, Ishiguro highlighted the importance of resilient supply chains amidst geopolitical fragmentation.

“Japan’s stability, safety, and technological strengths have gained renewed appreciation,” he said. “Invest in Japan and talk to JETRO first.”

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