Quad leaders call for securing chip supply chain

TOKYO – The United States, Japan, India and Australia will agree next week to work on creating a secure supply chain for semiconductors at the Quad Summit in Washington, a signal that the four-way alliance intended to counter China in the Indo-Pacific is expanding its reach.

Leaders are expected to confirm that “resilient, diverse and secure technology supply chains for hardware, software and services” are vital to their common national interests, according to the draft joint statement obtained by Nikkei.

US President Joe Biden will host the first face-to-face talks between the leaders of the four-nation cadre known as the Quad. Japanese Prime Minister Yoshihide Suga, Australian Prime Minister Scott Morrison and Indian Prime Minister Modi will attend.

The document also establishes common principles on technological development, asserting that “the way in which technology is conceived, developed, governed and used must be shaped by our shared democratic values ​​and respect for universal human rights”.

The reference reflects a concern over the growing trend to use advanced technologies to protect and strengthen authoritarian regimes.

The draft joint statement does not specifically mention China, a nod to India’s intention to retain its non-aligned status and avoid moving forward in cooperation with countries specific.

Yet in an apparent reference to China’s alleged technology misappropriation, the project stresses that “the illicit transfer or theft of technology is a common challenge that undermines the very foundation of global technological development and must be addressed.”

Specifically, the Quad seeks to “launch a joint initiative to map capacity, identify vulnerabilities and strengthen supply chain security for semiconductors and their vital components,” the document said.

The United States and Japan account for just under 30% of global chip manufacturing capacity. Japan mainly produces memory chips and sensors, while the United States has central processing chips, such as Intel and Qualcom.

The world’s largest foundry, Taiwan Semiconductor Manufacturing Company, or TSMC, is a leader in manufacturing technology for the most advanced semiconductors. Chinese chipmakers are making aggressive investments to increase the capacity of more general-purpose semiconductors.

Australia and India do not have large local chipmakers, but have the capacity to contribute to the envisioned supply chain. India, which has a thriving IT industry but relies heavily on China for chips, called for strengthening supply networks through the Quad alliance.

The Quad said it hoped that the principles of technological development “will lead not only the region but the world towards responsible, open and high-level innovation”, calling for the same principles to be widely adopted by the international community.

“Technology should not be misused or abused for malicious activities such as authoritarian surveillance and oppression,” the document said, raising concerns over the use of surveillance systems backed by artificial intelligence to strengthen the power of the Chinese Communist Party. Some emerging countries are adapting similar technologies.

Quad nations will also cooperate to prevent technology leaks that can directly affect national security capabilities.

“We are advancing the development of secure, open and transparent 5G networks and beyond 5G,” the document said.

The Quad will also strive to use “open RAN”, which allows telecommunications operators to share the communications infrastructure by connecting equipment with different specifications.

By allowing countries with democratic values ​​to work together to build communication networks, the Quad hopes to counter Huawei, which holds 30% of the global base station market.

The Quad is an alliance of the four democratic nations of the Indo-Pacific region, positioned as a counterweight to China’s economic and militaristic growth.

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