[News] Japan to Back Chip Industry with $65 bln Support Plan

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According to a Reuters report, the Japanese government has proposed a USD 65.1 billion (JPY 10 trillion) plan to boost the domestic chip and AI industry through subsidies and other financial support.

The plan aims to provide support totaling USD 65 billion (JPY 10 trillion) by fiscal 2030, with the goal of strengthening Japan’s control over its chip supply chain in response to potential impacts from U.S.-China trade tensions, as noted in the report.

The report indicated that Japan’s government is set to submit this plan to the next parliamentary session, and the draft includes financial support for mass production of next-generation chips, specifically targeting Rapidus and other AI chip suppliers. The report highlighted that, the government anticipates an economic impact of approximately JPY 160 trillion according to the draft.

Rapidus is scheduled to begin mass production of cutting-edge chips in Hokkaido starting in 2027, in collaboration with IBM and the Belgium-based research organization Imec, as the report pointed out.

According to the report, Japanese Prime Minister Shigeru Ishiba stated that the government would not issue deficit-covering bonds to fund the chip industry support plan. However, detailed information on how the plan will be financed has not been disclosed.

Last year, the Japanese government announced that it would allocate approximately JPY 2 trillion to boost its chip industry, as the report noted.

The latest plan is part of a comprehensive economic package anticipated for Cabinet approval on November 22, calling for a total investment of JPY 50 trillion in the chip industry from both public and private sectors over the next 10 years, according to the report from the Reuters.

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(Photo credit: Rapidus)