A new framework for industrial policy: the case of semiconductors in Japan and the United States

Abstract Interest in industrial policy has intensified in recent years, calling for renewed conceptual understanding and more robust analytical tools. However, existing industrial policy frameworks remain insufficient to capture the complexity and dynamics of contemporary industrial systems and policies. To address this gap, this study proposes a novel industrial policy analysis framework comprising four analytically distinct yet interrelated dimensions: drivers shaping policy, value-chain segments, product types, and policy instrument mixes. The framework was developed through theory synthesis by integrating key dimensions identified in prior industrial policy research and was subsequently adapted to the semiconductor sector through policy document analysis of 108 policy interventions and 22 in-depth interviews. The sector was selected due to heightened policy salience arising from geopolitical tensions and supply-chain vulnerabilities. The analytical utility of the framework is demonstrated through two empirical case studies comparing (1) Japan’s semiconductor policies pre- and post-COVID-19, and (2) Japan–U.S. semiconductor policies. The first case study reveals a marked strategic reorientation in Japan’s semiconductor policy after COVID-19, characterised by clearer policy direction, expanded interventions and larger budgets, and a broader R&D scope. The second case study identifies a strategic convergence in policy instrument choices, with both countries prioritising industrial grants to support the manufacturing segment of advanced logic chips as a core competitive domain. This study demonstrates that the proposed framework can serve as a robust analytical tool not only for systematic comparison but also for identification of opportunities and threats within national industrial systems, thereby enabling more strategic industrial policy design.