President Joe Biden’s moves to reorient chip supply chains present business opportunities for allies in line with US national security interests, according to Rahm Emanuel, the American ambassador to Japan.
(Bloomberg) — President Joe Biden’s moves to reorient chip supply chains present business opportunities for allies in line with US national security interests, according to Rahm Emanuel, the American ambassador to Japan.
“There’s a group now meeting with our commerce secretary to understand the opportunities that exist from that Chips act,” Emanuel, a longtime Democratic Party insider and former Chicago mayor, told Bloomberg Television Thursday, referring to a $50 billion law designed to bolster domestic chip production. Companies from Japan and elsewhere could expand their footprint in the US or for research and development, he added.
The US last week unveiled expanded curbs on access to chips technology, part of a yearslong campaign to hamper China’s ability to develop the most advanced semiconductors and equip its military. Given the highly interdependent nature of the industry’s global supply chain, the announcement sent shockwaves across the sector, including in US-friendly countries with chip-equipment makers and technology providers.
That decision was “appropriate for the United States to do because it’s part of our national security self interest,” Emanuel said. “Our allies understand that and also want to be part of that future. And that’s America realizing and using not only its investment but doing it from a strategic perspective, where our allies can be our partner of that effort.”
Read more: Chip Industry Braces for ‘Heavy Blow’ From China Export Curbs
The US will also seek to resolve any issues with allies that might be caught up in the restrictions on doing business with China before taking any retaliatory action, the ambassador said.
“You work with allies before you ever get to the level of punishment,” Emanuel said. Japan has an “incredible leadership role” in the semiconductor supply chain, he added.
China is pouring billions of dollars into developing a domestic semiconductor industry that’s less dependent on the rest of the world, but those chipmakers still need to purchase highly specialized equipment from suppliers in the US, Europe and other parts of Asia.
Read more: China Says Biden’s New Chip Technology Curbs Will Harm Recovery
In the arena of electric vehicles and battery manufacturing, Japanese companies are stepping up investments in the US to build out capacity, Emanuel said. They’ve been attracted by US resources, labor, energy security and climate policies, he added.
“For a long time, the United States was basically idling and neutral,” Emanuel said. “We’re now seizing the future and major companies from Japan are investing that future in the United States, where we will continue to be the dominant leader in the transition to a more energy efficient and a more energy capable transition that’s climate friendly, and job friendly.”
Honda Motor Co. and Korea’s LG Energy Solution Ltd. are planning to spend $4.4 billion to build electric-vehicle batteries at a new joint venture in Ohio, part of a project by the automaker to start EV production at its plants in the state.
Panasonic Corp. is investing in a battery production site that’s expected to cost $4 billion, part of its efforts to ramp up production capacity to meet growing demand from Tesla Inc. and other EV makers.
“Our abundance of energy and a portfolio from nuclear to natural gas to renewables also give private companies the security, the reliability to make those type of investments that don’t exist around the world,” Emanuel said.
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