The Japanese Government is committing more than Y10trn ($65bn) in fresh support for the nation’s semiconductor and AI sector by 2030, reported Bloomberg.
This initiative, announced by Prime Minister Shigeru Ishiba, aims to ensure Japan remains competitive amid a global surge in spending on advanced technologies.
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The funding is expected to catalyse both public and private investments exceeding Y50trn over the next ten years.
Ishiba indicated that the public aid of more than Y10trn would be part of an upcoming economic stimulus package designed to help Japan close the gap with other global powers regarding chip support.
The US and its allies are currently racing to maintain an edge over China in AI-powered semiconductor capabilities, which are now viewed as critical for economic security.
US President Joe Biden’s 2022 Chips and Science Act aims to offer a total of $39bn in grants for chipmakers, alongside loans and guarantees worth an additional $75bn, with tax credits of up to 25%.
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By GlobalDataHowever, the financial commitment from Beijing likely surpasses that of the US.
China is said to lead globally in the number of chip plants under construction and has been strengthening its Big Fund to manage state investments in local semiconductor companies including Semiconductor Manufacturing International Corporation and Huawei Technologies.
Following a parliamentary vote to remain as premier, Ishiba expressed his desire to replicate successful regional revitalisation examples, such as TSMC’s chip plant in Kumamoto, across Japan.
He stated that discussions regarding the funding of these plans would take place with various ministries, clarifying that the measures would not be financed through deficit-financing bonds.
Japan’s Industry Minister, Yoji Muto, confirmed that the government would not raise taxes to support the new funding framework, although details are still being finalised.
Japan has already allocated around Y4trn in previous extra budgets to rejuvenate its chip sector, which includes Y920bn for Rapidus in Hokkaido, aiming to mass-produce advanced logic chips by 2027.
Muto clarified that the new funding framework would be distinct from the previously allocated Y4trn.
“Chips are not limited to Rapidus,” Muto stated.
“The process will be about considering how we will approach the next-generation semiconductor market from now on.”
In a separate development, Japanese AI start-up Sakana AI recently completed a $100m Series A funding round.
Established in 2023, Sakana AI aims to create a premier AI laboratory in Japan, focusing on developing technologies to assist the nation and its allies in addressing 21st-century challenges.
