Yasuhiro Ezaki

In February 2023, Mitsubishi Heavy Industries (MHI) announced its withdrawal from the Mitsubishi SpaceJet (MSJ) project. Development of the MSJ, which began in 2008 under the leadership of the Ministry of Economy, Trade and Industry (METI), was intended to mark Japan’s re-entry into the aircraft industry—a sector from which the country, as a defeated nation, had been forced to withdraw—and to make a full-scale entry into the aircraft market, which was dominated by European and American companies. Japan, once known as a “manufacturing powerhouse,” had seen the international competitiveness of its electronics industries—such as home appliances and semiconductors—decline, leaving it reliant on the automotive industry. Furthermore, with China leading the charge in next-generation EVs as a national strategy, the automotive industry could no longer rest on its laurels; the Ministry of Economy, Trade and Industry (METI) saw the aircraft industry as a way to revive Japan’s “manufacturing” prowess. However, repeated development delays and the COVID-19 pandemic, which caused aircraft demand to evaporate, ultimately dealt the project its final blow. On the other hand—though a direct comparison with private jets is not possible—automaker Honda succeeded in commercializing the HondaJet. This marks an instance of aircraft development where the heavy industry sector failed, while the automotive industry succeeded. Conceived by Michinori Fujino, who served as President and CEO of Honda Aircraft Company in the U.S., the HondaJet was designed from scratch and brought to market over the course of 30 years—a period during which Fujino, who also served as the head of design and development, was involved in its development since joining Honda. At the time, he boldly stood up to harsh criticism from successive Honda executives. He not only fostered a shared understanding within the company of the significance of Honda’s involvement in the HondaJet project but also demonstrated remarkable foresight by deciding against pursuing this untested venture in Japan—where there was no established infrastructure—and instead establishing a base in the United States to nurture the business within the American ecosystem. Furthermore, the fact that he remained the project leader consistently until completion was a major factor in its success. In contrast, the MSJ project followed a completely different line of thinking and trajectory. Since this was a national project led by the Ministry of Economy, Trade and Industry (METI), establishing a base overseas was out of the question. I would like to discuss the differences in the two companies’ business strategies regarding “manufacturing” from a comparative management perspective.

As semiconductors become increasingly vital as strategic materials, the Japanese semiconductor industry has experienced a decline since the late 1990s. However, maintaining a domestic manufacturing base for cutting-edge semiconductors has now become crucial for economic security. This imperative is underscored by risks such as potential contingencies in Taiwan driven by the US-China trade friction and semiconductor decoupling, Russia's invasion of Ukraine, and supply chain disruptions caused by the COVID-19 pandemic. To understand how to revive this sector, I am conducting research focused on literature reviews and interviews with key stakeholders to examine the reasons behind the past decline and to analyze the current business strategies being deployed by the Japanese semiconductor industry. The success or failure of specific case studies, such as TSMC’s new Kumamoto plant and the new joint venture Rapidus, will inevitably have a profound impact on the regional economies and revitalization of Kyushu and Hokkaido, and by extension, the resurgence of the entire Japanese semiconductor industry. By comparing these initiatives with past failures, I would like to present a basic framework today. The goal is to leverage these insights to establish new business models and strategic formulations necessary to guide these projects toward success.