Is Japan taking over China’s position as the semiconductor hegemon? Plus: BNPL is now critical to keep up with inflation

Japan at the center of the semiconductor world? The re-emergence of Japan as a semiconductor powerhouse is driven by Western allies looking to reshape the global chip supply chain away from China, reports the Financial Times. Seven major semiconductor producers — including Taiwan Semiconductor Manufacturing and Intel — announced plans to pour investments in Japan for semiconductor research, development, and manufacturing. The announcement comes after long standing tensions between South Korea and Japan have begun to thaw in relations. The topic was the center of discussions at an unprecedented meeting in Tokyo involving Japanese prime minister Fumio Kishida, the heads of chipmakers including Taiwan Semiconductor Manufacturing, South Korea’s Samsung Electronics and Intel and Micron of the US.

Looking for security amid supply chain instability: The gathering further solidifies the industrial blocs that are emerging on the back of soured US-China relations, which are producing signs of decoupling in global supply chains. “Investing in secure supply chains and a strategic partnership for your economic and national security is the key cornerstone of confronting economic coercion,” Rahm Emanuel, the US ambassador to Japan, told the Financial Times.

It started out as a pandemic trend, but BNPL is now a core ingredient in how consumers keep up with inflation:The surge of buy-now-pay-later (BNPL) options, brought on by the pandemic (where most of us stayed at home, relied on online shopping and saved a bit of money) has become a source of financial relief for many in the US looking to bridge the gap between paycheck to paycheck, Bloombergreports. Initially used as a facility to pay for once-in-a-bluemoon purchases such as flights, electronics, and furniture, consumers today use them to pay for their weekly groceries. Losing their jobs to the pandemic, navigating soaring inflation, or being instantly gratified by buying what they want, consumers find that BNPL options are a lot more sympathetic than credit cards, with the latter potentially leading to a damaged credit score due to late payments.

Too many BNPL options = loan stacking. Many scheduled repayments and the variety of BNPL options are the caveats that most Americans highlight for BNPL facilities. Since BNPL apps are not covered by any consumer protection laws (unlike credit cards) individuals who are not financially viable to pay back their purchases without spending their entire incomes are not prevented from taking on more BNPL facilities. In fact, some consumers report paying back their BNPL loans using their credit cards — a vicious cycle that stacks up crippling interest payments.