Japanese tech companies are defenseless, claims a top official

Japan is susceptible to foreign activist investors buying sensitive tech companies such as Toshiba, as local shareholders do not step up in the time of hardships.

Akira Amari, a powerful picture in the ruling Liberal Democratic Party that leads its semiconductor strategy group, said; Japan’s private division is “unaware” of its significance to national security.

Amari made the statements as Japan analyzed a tightening of export controls and laws on foreign investment amidst rising tensions between the US and China, over semiconductor technology.

Japanese tech companies are defenseless

Last month, activists expelled the chairman of Toshiba’s board of directors, displaying their power to control one of Japan’s most sensitive tech companies.

The business community said Toshiba is so valuable, but only the activists stepped forward with the money.

Management risks related to Toshiba including – past accounting infamy, fictitious contracts booked at its subsidiary, and recent suspicions cast by a leading shareholder on its administrative strategy. All of that contributes to the discrepancy as well.

Japanese tech companies reign:

In the late 1980s, Japan’s chip industry surpassed the United States to become the largest industry in the world. But it suffers from a sharp decline. Except for Kioxia and Sony, which bag a large market share in flash memory chips.

Read more: Global chips shortage plunges The UK’s car sales

Amari said Japan risks plummeting irrevocably behind in semiconductor technology unless it works more closely with the US, to drive back the warnings from China.

America is number one and Japan is number three in terms of economic strength. If, the number one and number three must have a strategic coalition to compete with the number two nation.

Japan wants to work together with the Taiwanese company to help its semiconductor manufacturers stay competitive as chip demand grows with; 5G infrastructure, self-reliant driving technology, data centers, and artificial intelligence.

Japan must spend at least a trillion yen (about $9 billion) in the current fiscal year and trillions more in years to come to prevent the nation’s vital semiconductor industry from tumbling further behind.

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