Japan’s government has shown another sign of its intent to be a world leader in the chip industry again by announcing it will pump about $13 billion into its efforts this year.
Tokyo said it will allocate roughly 2 trillion yen in a bid to reclaim its past glory in the critical sector. The country is a leading provider of chipmaking tools and materials but lost its edge in manufacturing in recent decades and is now providing subsidies to chipmakers to build capacity.
Some of the funds, which will be earmarked through a supplementary budget for this fiscal year, are expected to be used to support Taiwanese chipmaker TSMC and chip foundry venture Rapidus, which aims to manufacture cutting-edge chips in Hokkaido.
The chip industry allocation is part of Prime Minister Fumio Kishida’s 13.1 trillion yen spending promised in the 2023/24 extra budget which his government approved on Friday.
To fund the spending, Japan is set to issue close to 9 trillion yen ($59.8 billion) in bonds, raising some concerns about ballooning debt.
- Reuters with additional editing by Sean O’Meara