Japan Unveils US$65 Billion Plan to Boost Domestic Chip Industry
Japanese Prime Minister unveils a US$65 billion plan to support chip and AI industries. Proposal aims to provide over 10 trillion yen in support by fiscal 2030. Focus on chip foundry venture Rapidus and other AI chip suppliers.
The plan, set to provide support exceeding 10 trillion yen (US$65 billion) by fiscal 2030, is a strategic move as countries seek to fortify control over their chip supply chains amidst global uncertainties like trade tensions between the United States and China.
The Japanese government is gearing up to present the plan, which includes legislation to bolster the mass production of next-generation chips, in the upcoming parliamentary session. The proposal zeroes in on chip foundry venture Rapidus and other AI chip suppliers, with an anticipated economic impact of approximately 160 trillion yen.
Rapidus, led by industry experts, is gearing up for large-scale production of cutting-edge chips in Hokkaido from 2027 in collaboration with IBM and Belgium's Imec research organisation. Prime Minister Ishiba clarified during a recent press briefing that the government would not resort to issuing deficit-covering bonds to fund the chip industry support plan, although specifics on financing were not disclosed.
A deficit-covering bond is typically issued to offset a shortfall in state revenue. In a previous announcement, the Japanese government earmarked around 2 trillion yen to bolster its chip sector. The latest plan, a component of the government's comprehensive economic package slated for cabinet approval on Nov. 22, will call for a combined 50 trillion yen investment from the public and private sectors in chips over the next decade.
Ishiba also mentioned plans for consultations with business and labour union representatives later this month to address next year's annual wage negotiations. The government's focus on achieving sustained wage growth is crucial as households grapple with rising living expenses, which could potentially impact consumer spending and the overall economy.
Japanese Prime Minister unveils a US$65 billion plan to support chip and AI industries.
Proposal aims to provide over 10 trillion yen in support by fiscal 2030.
Focus on chip foundry venture Rapidus and other AI chip suppliers.
Source: REUTERS