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Japan's chip industry faces old challenge: Scaling up production

A boutique investment bank is working to set up a chip foundry to fill the gap

TOKYO -- Japanese auto parts maker Denso said late last month that it will build a major production plant for power chips with Taiwanese foundry UMC, a move that highlights the growing demand for these specialized semiconductors used in everything from electric vehicles to trains to wind turbines.

But the announcement is also another sign of what Japanese government and industry experts say is the domestic chip industry's greatest weakness: fragmentation.

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