Japan Unveils $65 Billion Plan to Boost Domestic Chip and AI Industries

Japan unveils $65 billion plan to aid domestic chip industry

The plan, which will provide support worth 10 trillion yen ($65 billion) or more by fiscal 2030, comes as countries look to strengthen control over their chip supply chains after global shocks including trade tensions between the United States and China. TOKYO: Japanese Prime Minister Shigeru Ishiba on Monday unveiled a $65 billion plan to boost the country's chip and artificial intelligence industries via subsidies and other financial incentives. The plan, which will provide support worth 10 trillion yen ($65 billion) or more by fiscal 2030, comes as countries look to strengthen control over their chip supply chains after global shocks including trade tensions between the United States and China. Japan's government intends to submit the plan, including bills to support the mass production of next-generation chips, to the next parliament session, according to a draft of the plan seen by Reuters earlier on Monday. It specifically targets chip foundry venture Rapidus and other suppliers of chips for artificial intelligence, the draft showed. The government expects the economic impact to total around 160 trillion yen, according to the draft. Rapidus is headed by industry veterans and is targeting mass production of cutting-edge chips on the northern island of Hokkaido from 2027 in partnership with IBM and Belgium-based research organisation Imec. In Monday's news conference, Ishiba said the government would not issue deficit-covering bonds to fund the plan to support the chip industry. He did not reveal details on how it would be financed. A deficit-covering bond is a type of bond that is issued to make up for a state revenue shortfall. Last year, the Japanese government said it would allocate some 2 trillion yen to support its chip industry. The latest plan, part of the government's comprehensive economic package to be approved by cabinet on Nov. 22, will call for a total of 50 trillion yen public and private sectors investment in chips over the next 10 years. Ishiba said the government planned to meet with business and labour union representatives later this month to discuss next year's annual wage negotiations. Achieving sustained wage increases has been a priority for the government as rising living costs hit households, potentially weighing on consumption and the broader economy.

Japan mulls USD65B in public support for AI, chips

TOKYO (XINHUA) - Japanese Prime Minister Shigeru Ishiba has unveiled a plan to introduce a new framework for providing over JPY10 trillion (USD65 billion) in public support over the coming years to bolster artificial intelligence (AI) and semiconductor industries through 2030, local media reported. The initiative seeks to stimulate private sector investment, aiming to spur over JPY50 trillion in public and private investment combined over the next decade, the public broadcaster NHK reported, citing Ishiba at a press conference. To support the initiative, the government was considering issuing bonds backed by shares in NTT and other government-owned assets. In recent years, Japan's semiconductor industry has received close to JPY4 trillion in government funding. However, further support has been deemed necessary, with companies like Rapidus, which focused on domestic production of advanced semiconductors, projected to need an additional JPY4 trillion. The new strategy highlighted the government's long-term commitment to strengthen AI and semiconductor sectors, but the substantial and sustained support for specific industries has raised questions about its viability and effectiveness.

Japan's Ishiba Pledges Over $65 Billion Aid for Chip, AI Sectors

Japanese Prime Minister Shigeru Ishiba pledged more that $65 billion of support for the nation's semiconductor and artificial intelligence sector over the next decade. Ishiba said he hoped aid of more than ¥10 trillion ($65.1 billion) for the sector by fiscal 2030 would serve as a catalyst to generate public and private investment of more than ¥50 trillion over the next 10 years.

Japan readies ambitious $65 billion plan to revive homegrown semiconductor manufacturing -- Expects economic return of over $1 trillion

Japanese Prime Minister Shigeru Ishiba has revealed a massive $65 billion plan to revitalize the chip industry in Japan, reports Reuters. The plan involves subsidies and other financial incentives for local chip production and is set to arrive by 2030. This is a part of Japan's longstanding efforts to rise among the ranks of the semiconductor world, hoping to revisit its glory days in the 1980s and 90s. Based on the draft, the grants are primarily for Rapidus and other AI chip manufacturers - whose names have not been mentioned. Rapidus was formed in 2022 owing to a landmark agreement between the Japanese government and eight multinational firms - all in an attempt to produce bleeding-edge chips in Japan. The foundry plans to mass-produce 2nm chips by 2027 which sets the bar pretty high. The Prime Minister reaffirmed that the grants would not be funded through deficit-covering bonds but did not clarify the exact details. In any case, the plan is expected to be approved by the cabinet on November 22. It targets investments worth $324 billion (50 trillion yen) through public and private firms in the semiconductor field over the next 10 years. The Japanese government expects an economic return of roughly $1 trillion (160 trillion yen) - yes we had to double-check that number. It doesn't take an expert to infer that Japan has high aspirations with such a sizeable budget but its viability can only be seen in the years to come. It took TSMC many years to strengthen its foothold in the industry; whose direct consequences are being faced by Intel and Samsung since chip makers are likely to prefer TSMC over the two. Likewise, we must question whether Japan has enough skilled engineers, or skilled enough engineers, given that it has been out of the top rank in semiconductors for many years. Case in point; China - with its "Big Fund Trilogy" or the neverending IP Theft accusations still hasn't been able to catch pace with the competition. While we won't see a chip designer like Nvidia choosing Rapidus in favor of TSMC anytime soon - it is still good to see more competition in the market as prices for cutting-edge nodes are slowly getting out of hand.