TOKYO (July 3): The European Union (EU) will deepen cooperation with Japan on semiconductors, industry chief Thierry Breton said on Monday, as countries move to strengthen control over a technology vital for the defence, electronic and automotive sectors.

The EU and Japan will work together to monitor the chip supply chain and facilitate the exchange of researchers and engineers, Breton said. The EU will also be supportive of Japanese semiconductor companies considering operating within the bloc.

"We believe that it's extremely important to secure the supply chain of semiconductors," Breton told Reuters in Tokyo, where he is discussing cooperation on chips and artificial intelligence with the government and companies.

Japan is offering subsidies to revitalise its chip industry, which retains an edge in materials and equipment but has lost overall global market share, while a Japanese government-backed fund last week agreed to buy photoresist maker JSR Corp for US$6.4 billion to drive consolidation in the industry.

Japan is also backing chip foundry venture Rapidus, whose executives are scheduled to meet Breton on Tuesday.

"I think it's really an important initiative and going in the right direction," he said of the foundry venture.

Plans by Rapidus to produce cutting edge chips rely on support from Belgium-based research company imec and IBM.

The deepening cooperation between the EU and Japan comes as the bloc has pledged to reduce its dependence on China, which aims to increase its capabilities in high-end technology such as chips.

"We made it very clear we just want to de-risk," Breton said.

Breton also met with Japan's Minister for Digital Affairs Taro Kono, Minister of Internal Affairs and Communications Takeaki Matsmoto, and State Minister for Economy Trade and Industry Fusae Ota, for the first EU-Japan Digital Partnership ministerial talks.

They agreed to cooperate on undersea cable connectivity, semiconductors and cybersecurity, and in other areas of the digital economy, they said in a joint statement.

At a subsequent news conference, Breton said much of the discussion was about AI. He said a further round of talks would be in Brussels in the first half of next year.