Japan to Tighten Pre-Screening of Foreign Investment in Semiconductors and Rechargeable Batteries
The Japanese Ministry of Finance has recently announced that they plan to add nine new areas, including semiconductors and rechargeable batteries, to the "core" industry list that requires stricter pre-screening of foreign investors. This decision comes as Japan seeks to ensure supply chain security and prevent technology leaks by strengthening the regulation of critical products.
The addition of semiconductors and rechargeable batteries to the list is particularly significant for the electronics industry, as these components are essential to the production of a wide range of devices, from smartphones and laptops to electric vehicles and renewable energy systems. This move highlights Japan's commitment to protecting its technological capabilities and intellectual property, as well as maintaining its position as a leading producer of cutting-edge electronics.
The other areas included in the list are fertilizers such as potassium chloride, machine tools and industrial robots, metals and minerals, metal 3D printers, permanent magnets, natural gas, and ship equipment. This list covers a wide range of industries, indicating that Japan is taking a broad approach to protecting its critical infrastructure and strategic assets.
The Japanese government's decision to add these areas to the list is in line with a 2019 legal amendment that requires foreign investors holding 1% or more of shares in core industries to notify the government in advance. This threshold was previously set at 10%. By reducing the threshold for notification, Japan hopes to have greater visibility into foreign investment activity in sensitive areas and to take measures to protect its economic and national security interests.
It is important to stay up to date on any new regulations and pre-screening processes to ensure compliance and minimize disruptions to business operations. Additionally, distributors should explore opportunities to work with Japanese manufacturers and suppliers to maintain a stable supply chain and reduce potential risks.
