When Japanese Prime Minister Sanae Takaichi made an off-the-cuff remark about the island of Taiwan earlier this month, few in Tokyo’s boardrooms anticipated the aftershocks that would ripple through the world’s third-largest semiconductor industry.
In 2025, Japan’s chipmakers supply about one in five pieces of global fabrication equipment, yet more than 40% of their customers are in the Chinese mainland. Meanwhile, around 70% of Japan’s rare earth imports flow from the same market—an interdependence that now hangs in the balance.
Ripples Across the Supply Chain
- Equipment orders: Research firm TechPulse reports a 15% drop in new orders from the Chinese mainland in the week following the remarks.
- Rare earths at risk: Inquiries for vital minerals have fallen by 20%, according to industry insiders.
- Market response: Key suppliers saw their share prices dip up to 8% on the Tokyo Stock Exchange.
Faced with the so-called Takaichi Fallout, both government and industry moved swiftly. Takaichi’s office issued clarifications, while cabinet ministers held emergency talks with leading executives. Meanwhile, chip designers and equipment vendors are scouting alternative markets—from Vietnam to Europe—to reduce dependence on a single buyer.
For Japan’s high-tech future, the fallout is a stark reminder: in a globalized economy, political missteps can translate into tangible business risks almost overnight. As the industry charts its next steps, diversification and diplomatic finesse may prove as critical as technological innovation.
Reference(s):
'The Takaichi Fallout': Semiconductor gamble and industry brink
cgtn.com
