Aurelia Butler

Ukraine will again be a focus for leaders of the Group of Seven (G7) as they gather for the second day of a three-day summit in the Japanese city of Hiroshima on Saturday, where President Volodymyr Zelenskiy is also due to arrive.Outreach to the “Global South” is a theme for the summit, underscoring both the rising economic importance of countries such as India and the vast inroads China has made across developing markets – building infrastructure and extending finance.Members of the G7, composed of the United States, Japan, Germany, France, Britain, Italy and Canada, are increasingly focused, officials say, on how China’s influence in low and middle-income countries is impacting supply chains and economic security.The group is due to release a statement on economic security, a U.S. official said. Russia’s war in Ukraine has also unduly hurt low-income countries, the G7 members say.”We remain concerned that serious challenges to debt sustainability are undermining the progress” towards sustainable development goals, the leaders said in a draft of their final communique obtained by Reuters on Friday.”Low- and middle-income countries are disproportionately affected by Russia’s war of aggression against Ukraine,” they said in the draft. More

Leading US chipmaking material supplier Entegris says it is committed to investing in Taiwan as it opens the company’s “most advanced” manufacturing centre on the island despite geopolitical tensions surrounding Asia’s top chip economy.“Our investment is just a sign of the conviction we have in the future of the semiconductor industry in Taiwan,” Bertrand Loy, president and chief executive of Entegris, told Nikkei Asia ahead of the grand opening of its $500mn facility in Kaohsiung, in southern Taiwan.“This is the largest investment ever in the history of this company and the important news is that this is going to be our most advanced manufacturing centre . . . If you want to get to 2-nanometre, 1-nanometre [chips] or below, the best filters will be manufactured in Taiwan.”The smaller the nanometre size, the more advanced and powerful the semiconductors. Currently, the world’s top chipmakers — Taiwan Semiconductor Manufacturing Co, Samsung Electronics and Intel — are racing to produce cutting-edge chips of 3 nanometres and below.Entegris is the world’s top supplier of the advanced filters and containers needed to ensure the purity of chemicals and liquids used in making chips and displays. Such materials are becoming increasingly critical as semiconductor manufacturing grows more sophisticated, with less margin for defects.Counting TSMC and most other chip manufacturers around the world as customers, Entegris would make the company’s most advanced filters, containers and dielectric materials in Taiwan, according to Loy. The chief executive said the company would also expand its team in Taiwan from about 700 employees to more than 1,000. The new facility is entering test production and qualification will take place through the second half of 2023. Mass production is scheduled to begin in 2024.Loy said it made more sense to build chipmaking material production sites close to global chip hubs like Taiwan, South Korea, the US and Japan that have committed to developing cutting-edge semiconductor manufacturing technologies, rather than in regions focusing on less-advanced nodes, such as Europe and India.“If you do not have that commitment to leading-edge [chip] process, then your [chip plants] most likely can be satisfied with older generation products,” Loy said. “And it means that you can be supplied from pretty much anywhere in the world.”He said that was the reason the company had no plans to produce chip materials in either Europe or India despite these economies gearing up their own levels of chip production.Loy also said the company had taken into account the geopolitical tension between China and Taiwan, and that it planned to add some additional redundant capacity at its Colorado Springs site in the US.“Business continuity plans have always been an important consideration, and that [should be in place] for all of our strategic products,” the chief executive said, adding that the company hoped to make all its important products in at least two locations to increase supply chain resilience.The semiconductor industry had learned a lot of lessons from the unprecedented supply chain constraints over the past few years, Loy said.China views Taiwan as a part of its territory and does not rule out taking control of the democratically ruled island by force. Since former US House Speaker Nancy Pelosi visited Taipei last summer, Beijing has conducted several live military drills around Taiwan and escalated tension.Regarding the current chip industry downturn, Loy said he was not “overly concerned” despite expectations that the industry’s outlook would remain unclear until later this year or even into 2024.“There’s pretty good evidence that we will be hitting bottom [of the downturn] in the [second] quarter. But the rate and the pace of recovery remains pretty uncertain,” he said. In previous downturns, “you have no visibility and then suddenly, it starts ramping up very fast. So, I’m not overly concerned about the lack of visibility because this is not new at all.”A version of this article was first published by Nikkei Asia on May 10 2023. ©2023 Nikkei Inc. All rights reserved.Related storiesJapanese chip-tester makers bet big on 3D, EV devicesArm’s IPO filing fuels speculation of SoftBank going privateCommercial contracts add China-Taiwan risk clauses as tensions riseTaiwan tech suffers sales crash in sign of chip and PC slumps More

G7 leaders are planning to announce on Saturday measures to respond to Chinese “economic coercion”, as the group of advanced economies seeks to adopt a common approach on Beijing.UK officials said a “platform” would be unveiled at the G7 summit in Hiroshima that would provide a forum for the identification of economic vulnerabilities and co-ordination of protective measures.UK Prime Minister Rishi Sunak will open a summit session on economic security by noting China’s use of trade measures to coerce countries including Australia and Lithuania over political disputes. “The platform will address the growing and pernicious use of coercive economic measures to interfere in the sovereign affairs of other states,” Sunak said in remarks released before the meeting.“We should be clear-eyed about the growing challenge we face. China is engaged in a concerted and strategic economic contest.”A US official said G7 nations — the US, UK, Japan, Canada, Germany, France and Italy — would outline “a common set of tools that we’ll use to address common concerns, both when it comes to China but also for other countries”.Another official involved in the G7 talks said the tools would be used “in very specific areas” such as national security and issues involving the World Trade Organization.In recent months, China has imposed sanctions on US weapons companies Lockheed Martin and Raytheon, launched an investigation into US chipmaker Micron, raided US due diligence firm Mintz and detained a local executive from Japan’s Astellas Pharma group.President Xi Jinping’s administration is considering curbing western access to materials and technologies critical to the global car industry, according to a Chinese commerce ministry review.The US official said the G7 would also release on Saturday a summit communique highlighting “a common approach on China”.The communique is being released one day earlier than planned because the leaders are expected to focus on Ukraine on Sunday. Ukraine’s president, Volodymyr Zelenskyy, will travel to Asia for the first time since Russia invaded his country to join the summit in person.The co-ordination on China follows two years of efforts by the US administration of Joe Biden, helped by Japan, to foster unity among G7 members on challenges posed by Beijing.European officials said the G7 would take a “clear-eyed perspective” towards China, maintaining that co-ordinated action was more powerful than unilateral measures by individual countries.“We want to avoid misunderstandings [with Chinese leaders], but confront them when necessary,” added one of the officials.

But China on Friday attacked the G7’s language on “economic coercion”.“The US often accuses other nations of utilising their great power status . . . and economic coercion to enforce compliance and engage in coercive diplomacy,” the Chinese foreign ministry said. “It is, in fact, the United States itself that instigates coercive diplomacy.”One western diplomat said there was a big focus at the G7 on winning over the “global south”.“It’s clear that China’s influence is significant on these countries around the world,” the diplomat said. “I think we are all trying to work out how we demonstrate to those middle-ground countries that we care about them at all times, not just when we want them to vote in a particular way.”Additional reporting by Joe Leahy in Beijing and Alice Hancock in Brussels More