New regulations require foreign entities to seek approval when investing in Japanese semiconductor manufacturing
semiconductor

New regulations require foreign entities to seek approval when investing in Japanese semiconductor manufacturing

The Japanese Ministry of Finance (MOF) today announced that foreign investors must now “file a prior notification for screening” when making an inward direct investment on companies that build semiconductor manufacturing tools and advanced electronic components. This move is an expansion of Japan’s Foreign Exchange and Foreign Trade Act (FEFTA), which regulates foreign direct investment in Japanese companies.

The expansion of “specified critical products” under the Economic Security Promotion Act is driven by the need to ensure a stable supply chain for Core Business Sectors and prevent other countries from using economic pressures to influence decisions by the Japanese government in international relations. According to the MOF (PDF), these are the sectors that require approval:

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Sector Examples
Production of equipment related to semiconductor manufacturing Machinery, appliances, parts, supplies, and materials used mainly for semiconductor manufacturing
Manufacture of advanced electronic components Electronic components such as multi-layer ceramic capacitors and their materials
Manufacture of machine tool components Ball screws, linear guides, and linear scales
Manufacture of marine engines Four-stroke diesel engines for civil marine use with 735kW output or greater
Manufacture of fiber optic cables Quartz-based optical fibers and fiber optic strands
Manufacture of multifunctional machines Machines and appliance that can send and receive data and have multiple functions like copying and scanning

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