Japan Prepares Chipmakers Package Worth $65 Billion

The Japanese government announced a JPY10 trillion ($65 billion) package of subsidies and other incentives. It should support the mass production of advanced chips used for AI applications.

Prime Minister Shigeru Ishiba unveiled a draft plan, running until fiscal 2030, which will be submitted at the current parliament session, without providing details on how it will be funded. The draft indicated the incentives would have a total economic impact of about JPY160 trillion.

In April, the government said it would subsidize JPY590 billion to support Rapidus Corp’s aims to mass produce 2nm logic chips. Rapidus and IBM set up a joint partnership in 2022 to develop advanced semiconductors to be produced in a new fab in Japan.

Over the past three years, the government has offered some JPY4 trillion in support to the semiconductor sector. Japan has joined the US and other countries in Europe to invest aggressively in their domestic chip sectors, driven by rising trade tension with China and supply chain disruptions.