Japan

Introduction Semiconductors are a critical foundation of the modern economy, evolving from conventional electronic components into indispensable technologies supporting AI, robotics, smartphones, cloud computing, and advanced manufacturing. The global semiconductor market reached USD 630.5 billion in 2024 and is projected to exceed USD 1 trillion by 2030. As digitalization becomes a key source of national power, countries worldwide are pursuing unprecedented policies to secure semiconductor supply chains and technology. The US, through the CHIPS and Science Act, provides subsidies, tax incentives, and export controls targeting China for sensitive semiconductors and advanced manufacturing equipment. China, Europe, and Taiwan have similarly launched large-scale strategic initiatives. Japan has followed this trend by implementing substantial policy measures, including subsidies and other financial support to expand domestic manufacturing capacity under the 2022 Economic Security Promotion Act (“ESPA”), large-scale backing through the NEDO (New Energy and Industrial Technology Development Organization) framework, and funding from the Post-5G Fund to develop advanced semiconductor technologies for post-5G information and communication systems. Learning from past shortcomings - such as insufficient strategic support and underinvestment in R&D, which caused Japan’s global market share to fall from nearly 50% in 1990 to around 10% today - the government has shown a strong commitment to strengthening domestic supply chains and R&D. To enhance domestic capabilities and competitiveness, large-scale programs now address specific “weaknesses” in Japan’s semiconductor industry based on detailed assessments of supply chains and technology. Given such strategic importance, foreign direct investments (“FDIs”) in Japan’s semiconductor industry are increasingly subject to close scrutiny under the Foreign Exchange and Foreign Trade Act (“FEFTA”). While such investments are not categorically prohibited – as illustrated by the acquisition of Kioxia Corporation (formerly Toshiba Memory) by a consortium led by Bain Capital – foreign investors must carefully assess the likelihood of a strict and long duration government review and any potential restrictions on post-investment activities. In doing so, they should consider factors such as their own profile, the strategic importance of the target company, the government’s interest, and the nature of the investment, including the intended level of post-investment management involvement. For investment funds, it is also critical to evaluate any exit-related restrictions, including limits on future buyers, when making investment decisions. Osawa brings extensive experience in the Japanese government, having worked on both FEFTA policymaking and FDI screenings - reviewing over 2,000 investment cases as a regulator – along with broader semiconductor-related policy initiatives. He leverages his dual expertise in M&A and economic security to advise foreign corporations and investment funds. Together with his colleague Takamura, an M&A lawyer experienced in economic security–related cases, they provide an overview of recent trends in Japan’s semiconductor M&A market, highlight key regulatory developments, and offer practical insights for foreign investors navigating this strategic sector. View original article here. [Author] Oki Osawa (Partner) Mayuko Takamura

Introduction In recent years, the international environment surrounding companies has rapidly shifted from an era in which free cross-border economic activity was taken for granted to one in which companies must design their business operations taking into account geo-economic risks. For Japanese companies that may be affected by such changes in the environment, it has become increasingly important to assess developments in economic security policies across jurisdictions and to develop management strategies, together with detailed initiatives based on these strategies, to enhance their autonomy and indispensability. At the same time, many companies express concerns that such initiatives will increase costs in the short term and that it is difficult to determine the appropriate level of compliance. However, corporate efforts to address economic security and enhance autonomy and indispensability, including diversifying procurement sources to ensure supply stability, delivering products and services incorporating robust cybersecurity, or implementing measures to prevent the leakage of critical technical information, represent more than mere risk management. Over the medium- to long- term, these efforts enhance corporate value and create new business opportunities. In light of these developments, on November 20, 2025, the Ministry of Economy, Trade and Industry (METI), following deliberations by the “Study Group on Economic Security Management Guidelines” comprising private-sector experts and other stakeholders, released a draft “Economic Security Management Guideline” (the “Guideline”). The Guideline outlines the principles of which management should be aware and directions for initiatives when companies address economic security. The Guideline is open for public comment until December 26, 2025, after which METI intends to release a finalized version. METI also anticipates that Guidelines will be reviewed and updated on an ongoing basis in response to changes in the international environment, policy trends, and other developments. Since the renewed focus on economic security, driven by factors such as intensifying U.S.-China strategic competition, the expanded use of economic statecraft to exert influence through economic measures, and the COVID-19 pandemic, there has been extensive debate from various standpoints, perspectives, and angles regarding how companies should approach economic security. The Guideline is based on this accumulated body of discussions, and does not substantively introduce new arguments or perspectives. Nevertheless, it has significant value in that METI has distilled the key points of what had previously been somewhat fragmented discussions and presented, in relatively general terms, principles of which management should be aware and directions for initiatives. In this newsletter, attorney-at-law Mr. Osawa, who handles numerous matters related to economic security, together with Mr. Kitani and Ms. Morishita, as well as attorney-at-law Mr. Yuasa, who was involved in developing the Guideline as a member of the aforementioned study group and is familiar with its outline and drafting background, summarize the Guideline’s key points and discuss practical considerations for companies contemplating economic security responses tailored to their specific circumstances. View original article here. [Author] Oki Osawa (Partner) Yu Yuasa Tatsuyoshi Kitani Maya Morishita

Nagashima Ohno & Tsunematsu (“Nagashima”) is pleased to announce its new partners, foreign law partner (*), counsel and foreign law counsel effective as of January 1, 2026, as follows: Partners Tsutomu Kobayashi, Masashi Chusho, Akira Komatsu, Saori Kawai, Kosuke Nakamura, Kei Kajiwara, Daisuke Takagi, Takeshi Nagai, Kayako Tase, Takahiro Hatori, Takahide Fujii, Ryosuke Isaji, Ryota Saito, Yuta Sugie and Naoki Mochizuki Partner (Singapore) Patricia O. Ko Foreign Law Partner (*) Shejal Verma *Please note that we are not engaged in a Gaikokuho Kyodo Jigyo (the operation of a foreign law joint enterprise). Counsel Yoshiteru Matsuzaki, Yoshihiko Sakai, Sotaro Mori, Nozomu Takashima and Mami Sawada Foreign Law Counsel Junjian Wan We will continue to dedicate ourselves to providing high quality legal services to our clients. Your continued support will be greatly appreciated. View original article here.

Introduction On June 4, 2025, Japan amended the Whistleblower Protection Act, further enhancing protections for whistleblowers while strengthening sanctions for violations and expanding administrative enforcement powers. This is the first amendment in five years since the 2020 revision. Notably, the amendment introduces a clause providing that any dismissal or disciplinary action taken within one year following a whistleblowing report shall be presumed to have been taken in response to that report. This change is likely to create significant tension for corporate responses to whistleblowing in Japan and is expected to materially increase the burden on companies in handling such reports. The effective date will be set by Cabinet Order within 18 months from the date of amendment; while this date is not yet fixed, the amendments will take effect no later than sometime in 2026. Compliance and whistleblowing teams in each company should familiarize themselves with the amendments and assess, before the effective date, whether their internal frameworks and practices conform to the revised requirements. This article provides a brief overview of the amendments and practical notes considering them. View original article here. [Author] Tsubasa Watanabe, Partner