https://asia.nikkei.com/Politics/International-relations/Indo-Pacific/U.S.-led-Indo-Pacific-nations-to-consider-emergency-chip-stockpile
TOKYO — The 14 nations in the U.S.-led Indo-Pacific Economic Framework will consider creating a formal system for sharing semiconductor devices, medical products and other vital supplies during international emergencies, Nikkei has learned.
IPEF countries would have mutual access to these stockpiles during events that disrupt supply chains, such as military conflicts and pandemics. Specifics will be discussed during the two-day IPEF summit in Los Angeles this week.
The proposal responds to widespread reliance on China for many critical supplies, from industrially vital rare-earth elements to personal protective equipment (PPE) for health care workers.
The IPEF, a framework proposed by U.S. President Joe Biden, was launched in May with 13 nations: the U.S., Australia, Brunei, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand and Vietnam. Fiji joined as the 14th nation later that month.
But the group does not include Taiwan — a key link in the global semiconductor supply chain.
Members of the Indo-Pacific Economic Framework will consider sharing semiconductors and other crucial products during global emergencies to avoid reliance on China. © Reuters
Cabinet-level officials from the member states will gather in Los Angeles on Thursday and Friday for the group’s first in-person ministerial meeting. They seek to finalize a joint statement that includes the goal of establishing a crisis management mechanism for supply chains.
Improved supply-chain communications are to be part of the package. Each IPEF nation will appoint a contact person for this arrangement. Members will share data on inventory and risks as well as cooperate on alternative sources of supplies.
One proposal calls for promoting efficient transfers of critical supplies, including sharing inventory. Beyond semiconductors, the sharing framework likely would include PPE, along with rare earths and storage batteries.
If the IPEF members agree to the plan in a joint statement, preparations could begin next year.
Beijing restricted exports of rare earths to Japan following a 2010 incident in which a Chinese fishing boat collided with Japanese Coast Guard vessels near the Japan-administered Senkaku Islands, which China claims as the Diaoyu Islands.
More recently, many countries were dependent on Chinese-made products for PPE during the start of the coronavirus pandemic, a reliance that disrupted logistics and supplies.
Several IPEF members are strong in producing critical supplies. Japan, the U.S. and South Korea control nearly half of global semiconductor production capacity. For rare earths, the U.S., Australia and India produce almost 30% of the total volume. Indonesia is a major producer of medical PPE.
Some countries are unwilling to join the IPEF out of consideration for their relations with China. Some countries reportedly are reluctant to join a supply-sharing mechanism that sidelines China.
