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.
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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
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