Looking back at APEC Week
METI Minister Nishimura visit, semiconductor policy & more from a busy week in the Bay Area
Friends - what a month it has been! I’m pretty sure this November had the usual allotment of 30 days, but with travel, events and illustrious visitors to campus, it certainly has felt like several month’s worth of activity.
We are now wrapping up Week 14 of the fall semester at UC-Berkeley, which means concept review and course evaluations (i.e., the students rate faculty 😅) . Combined with a genuinely gratitude-inspiring, multi-generational Thanksgiving, this has put me in a reflective place.
This year’s Clusters class featured three new wrinkles, two of which came out of student suggestions. As the saying goes, to teach is to learn.
The screen grab above is from the first day of class in August.
The first Added For This Year bullet - clustering opportunities in our energy transition - was inspired by a 2022 class team which presented Portland, Maine, as an up and coming “climate cluster” (hat-tip to Team Portland). I touched on the topic of clustering opportunities in our energy transition in an earlier post on Morro Bay, and the implications of the floating offshore wind auction results there.
In that class - Class 9 of the semester - we hosted members of Principle Power, a floating offshore wind technology company. Thanks to Antoine Peiffer and team for joining. More on that conversation in a subsequent post.
For the second bullet - national strategies and tactics - I turned to resources recent and evergreen:
Chip War, from Chris Miller; 2022
Tiger Technology, from Cho and Matthews; 2000
The Entrepreneurial State, from Mariana Mazzucato; 2013
Innovation in Real Places, from Dan Breznitz; 2021
As well as my own startup experience in the 2000s securing DARPA and SBIR funding, and generally interfacing with the govtech community. Part of my job (as one of a few non-engineers at a small location technology company) back then was federal business development, standards development, and also federal policy advocacy, mainly around E911 and public safety issues.
Tiger Technology, in particular, offers a specific menu of tactics nation-states can choose, which is summarized below. While written from the perspective of a nation-state catching up, it is applicable to countries trying to direct innovation activity in a given area.
Tiger Technology lays out a four-step menu: Preparation; Seeding; Propagation; and Sustainability. Part of what we discussed as a class is what getting to Sustainability means.
For example, will the US need more CHIPS Acts? Given capital requirements in semiconductor fabrication, that seems not farfetched. If so, what does that necessitate in terms of administrative continuity? This seems like an obvious question but one that needs to be voiced. If you are Intel, for example, you probably want administrative continuity at the state and federal level.
Or, given the recent news regarding NuScale - the one company with an approved SMR design, meaning regulatory barriers to entry have been cleared - what should the US do? If the promise of SMRs is indeed modularity, then volume matters, and the first unit will be the most expensive. The state - in the form of DoE - may have to put its hand on the scale to try and kickstart that process.
Which is all to say, during the past few weeks (as Clusters class, we covered Israel during APEC Week), the classroom and real life have felt reinforcing.
In my last newsletter, I provided a preview of four upcoming APEC-related programs on the UC-Berkeley campus.
I was able to attend two of the four programs listed (not even faculty could get into PM Ibrahim’s talk if they didn’t reserve early enough!), and also attended part of a meeting of APEC Study Centers on campus, organized by the University of Buffalo. Thanks to Vinod Aggarwal for the invitation, and thanks to Professors Lewis and Poon at the University of Buffalo for their work organizing.
November 15: METI Minister Nishimura visit to Haas
Nine months after first socializing the idea with the Consulate of Japan in San Francisco, and four months formally sending an invitation, METI Minister Nishimura Yasutoshi joined us at the Haas School of Business on November 15, in between morning and afternoon sessions at APEC. The Clausen Center hosted in a special midday seminar, timed such that APEC researchers visiting campus could join, and Minister Nishimura could make it over to campus from the city.
Minister Nishimura’s remarks were tailored to his audience. He noted that UC-Berkeley was founded the same year as the Meiji Restoration - 1868. He saluted two impactful alums: Norman Mineta, our first Asian-American Cabinet Secretary (and namesake for San Jose Mineta International Airport); and Jennifer Granholm, former governor of Michigan and now US Secretary of Energy. (METI’s broad portfolio means Minister Nishimura interfaces with both Secretary Granholm (Energy) and Secretary Raimondo (Commerce).)
Acting Dean Jenny Chatman presided over a fireside Q&A on entrepreneurship, which was followed by an MOU signing between Berkeley SkyDeck, and JETRO, or Japan External Trade Organization.
SkyDeck likely needs no introduction if you are getting this newsletter; it is our accelerator here at UC-Berkeley, originally founded by the deans of engineering and business and the vice-chancellor for research. JETRO, which resides under METI, has a two-way mission of promoting trade into Japan, and helping Japanese businesses develop trade relations outside of Japan. It has offices in all 47 prefectures in Japan. SkyDeck, by educating entrepreneurs curated by JETRO, is arguably helping with both missions, by helping businesses scale, and helping Japanese entrepreneurs develop more globally oriented companies.
My favorite moment, outside of the MOU signing? Well, there were two.
Moment #1: The first was on the way into the event. Minister Nishimura noticed event flyers on the wall. Being an experienced public servant, he saw it for what it was: a photo opportunity.
If I’d been more prepared, I’d have asked him to sign. It was a warm, human moment during what was surely a busy day for him.
Moment #2: before we transitioned from the fireside to the MOU signing, we had time for one question. Semiconductor analyst
had joined us, and offered a broad question on Japan’s semiconductor policy.There was a delightful moment when the Minister acknowledged the sheer breadth of the question, paused for thought, and then made up his mind to expound on the topic. Which he then did for several minutes, on measures Japan and METI are taking to try and leap back up to the technology frontier in semiconductor fabrication through the Rapidus JV in Chitose, Hokkaido. CSIS describes Rapidus as a consortium of Japanese firms in collaboration with IBM and the European research organization IMEC. Members include NTT, Toyota, Kioxia (former Toshiba Memory), Denso, NEC and more. Groundbreaking for this took place in September 2023.
Rapidus is developing a 2 nm fab. Japan lags, by some estimates, by 10 years in terms of node generations. The Minister’s answer to that implied question - Japan does *not* face the innovator’s dilemma of needing to support the current franchise while also trying to innovate. Clearly it was a topic he could have talked about at greater detail. As this moderator commented, perhaps his remarks were a prelude to a sequel program?
As fate would have it we were talking about national strategies and tactics the following week in Clusters class, so I integrated the minister’s comments into class. I prefaced with a look at the relative positioning of nation-states in semiconductors (courtesy of BCG, 2021).
Ulrike Schaede at UCSD provides another perspective on this, and interconnected supply chains, in her 2020 book, The Business Reinvention of Japan.
November 18: Clausen Center Conference on Global Economic Issues: Deglobalization and Fragmentation
In case the Big Game wasn’t your fancy, the Clausen Center was ready with an alternative - a day-long program on global economics issues. I joined for the panel on semiconductors. My faculty colleague Matilde Bombardini presided over an excellent discussion on Semiconductors, Export Restrictions and the CHIPs Act, featuring:
Alberto L. Sangiovanni-Vincentelli, UC-Berkeley faculty and co-founder of Cadence and Synopsys
Chad P. Bown, Peterson Institute for International Economics
Matthew S. Borman, Deputy Assistant Secretary of Commerce for Export Administration – Bureau of Industry and Security
Ronnie Chatterji, Duke University and former White House Coordinator for CHIPS Act Implementation at the National Economic Council (NEC)
Prof. Sangiovanni-Vincentelli shared the state of talent in the US - the shift to CS from EE.
Whether this is a problem or a reflection of comparative advantage is in the eyes of the beholder, and Prof Bombardini rightly asked that question.
Left unspoken was the question of administrative continuity that I alluded to earlier. Industrial policy takes years if not decades to take root and hopefully succeed.
Even if just for consistency’s sake - are we reshoring fabrication or not? - this would speak to the importance of administrative continuity at the state and federal level. A further question is that of NSTC, which Chatterji referred to in his remarks, but to my understanding, as 2023 comes to a close does not yet have a head. A board of trustees has been named. Who will run it? What part of the semiconductor industry should that person come from?
Long post with lots of charts. Thanks to eagle-eyed reader Caseysimone for her comments on the various Autumn Leaves renditions I’ve been sharing. The autumn leaves were just so on campus during APEC Week, so I will share one more version of the jazz standard, this time from jazz luminaries Bobby McFerrin and Chick Corea.
Onward and upward!
Jon