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Japan and UAE to Cooperate on Chip and Battery Manufacturing

Published: 8.11.2023

Japan and the United Arab Emirates (UAE) have come to an agreement to create a novel framework for discussing potential investments in semiconductor and battery plants within Japan. This partnership emerges as Japan aims to fortify its supply chains for crucial technologies.

The UAE is growing interested in the clean energy sector. It is also home to a few sovereign wealth funds, which have significant financial resources. This makes the UAE an attractive partner for Japan, which is seeking to attract foreign investment in its chip and battery industries.

The newly established framework allows Japan and the UAE to explore potential investments across various domains, including semiconductor manufacturing, battery production, and research and development. Moreover, this agreement is viewed to bolster the economic ties between the two nations.

With the global chip shortage underscoring the significance of secure supply chains for critical technologies, Japan's role in the chip industry has gained prominence. However, Japan still relies on imports for essential materials. The collaboration with the UAE through this framework may enable Japan to reduce its import reliance and secure its supply chains for chips and batteries.

The agreement is also seen to promote the clean energy transition. The UAE is a major producer of oil, but it is also investing in renewable energy sources. The new framework could help Japan to access the UAE's expertise in clean energy and develop new technologies for the sector.

Beyond economic gains, the partnership is also geared towards advancing the clean energy transition. While the UAE is a major oil producer, it also shows commitment to investing in renewable energy sources. By leveraging the UAE's expertise in clean energy, Japan aims to develop novel technologies for this sector.

The agreement between Japan and the UAE is likely to have a number of market implications.

  • Increased Investment: The agreement is poised to attract more investment in the chip and battery sectors in both Japan and the UAE, potentially addressing the global product shortage and creating additional employment opportunities.
  • Shifting Supply Chains: As Japan and the UAE intensify their investments in these industries, there may be a transformation in global chip and battery supply chains, potentially making them influential players in the worldwide market.
  • Heightened Competition: The collaboration could also breed increased competition in the global chip and battery industries. The involvement of Japan and the UAE may challenge the existing dominance of established players in these sectors.
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