Japan is to designate an extra $13.3bn (¥2trn) to bolster its domestic semiconductor manufacturing, government officials told Bloomberg.

Some $5bn of the budget will support chip production, which could include a second Taiwan Semiconductor Manufacturing Co. (TSMC) facility in Kumamoto. The factory is expected to cost $13bn and will produce 2-12 nanometer logic chips.

The company is also developing a $8.6bn factory on the Japanese island of Kyushu which is anticipated to begin selling chips in 2024.

Around $4.2bn is allocated for research and development, according to Bloomberg’s sources. These funds could be accessed by Japan’s domestic chip startup Rapidus.

The budget will be finalised on Friday (10 Nov) if the cabinet approves the investment.

Last month, the secretary general of the Liberal Democratic Party, Yoshihiro Seki, said Japan announced plans to make $10bn of additional funds in subsidies available for a TSMC factory in Kumamoto and the domestic chip venture Rapidus.

Back in July, Thierry Breton, European Commissioner for Internal Market, said the European Union (EU) has announced it will strengthen its cooperation with Japan on the production of semiconductors as countries move to decrease their dependence on China. 

Dutch chipmaker ASML told the news outlet Nikkei that the company plans to open a new plant in Japanese island Hokkaido. The spokesperson stated that ASML would be opening its plant to provide support to Japanese chip maker Rapidus. 

The US, too, has been attempting to ensure the production of semiconductors domestically, while imposing sanctions on the export of semiconductor materials to China.