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Japan Plans To Subsidise Domestic Chip Output – Nikkei

Japan to set aside hundreds of billions of yen under a supplementary budget to create a pool of funds at NEDO, a state energy and industrial technology body

A logo of Taiwan Semiconductor Manufacturing Co (TSMC) is seen at its headquarters in Hsinchu
TSMC is set to open its first plant in Japan after a major push into chipmaking abroad, as Taiwan faces increasing risks of a Chinese invasion. Photo: Reuters.


Japan will create a scheme to subsidise construction of domestic chip factories and a new plant planned by Taiwan’s TSMC is likely to be the first recipient, the Nikkei newspaper reported on Monday.

The government will set aside several hundreds of billions of yen under this year’s supplementary budget to create a pool of funds at NEDO, a state-run body promoting research and development on energy and industrial technology, the paper said.

Companies will be eligible for the subsidies on condition they ramp up chip production in times of short supply, the Nikkei said without citing sources.

Prime Minister Fumio Kishida has pledged to put economic security among his policy priorities, including boosting domestic output of semiconductors.

The government is likely to subsidise up to half of TSMC’s estimated 1-trillion-yen ($8.82 billion) investment for building a chip plant in Kumamoto, southern Japan, the Nikkei said.

Government officials were not immediately available for comment.

The plant in Kumamoto, southern Japan, is expected to produce semiconductors for automobiles, camera image sensors and other products which have been hit by a global chip shortage, and is likely to start operations by 2024, the paper said.

The government will submit legislation to an extraordinary session parliament likely to be convened in December, the Nikkei said.


  • Reuters with additional editing by Kevin Hamlin



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Kevin Hamlin

Kevin Hamlin is a financial journalist with extensive experience covering Asia. Before joining Asia Financial, Kevin worked for Bloomberg News, spending 12 years as Senior China Economy Reporter in Beijing. Prior to that, he was Asia Bureau Chief of Institutional Investor for ten years.


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