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Japan to roll out $65bn in support for chips, AI

[Nov 12, 2024] – Japanese Prime Minister Shigeru Ishiba today announced a substantial new investment plan totaling over JPY10 trillion (approximately US$87 billion) for the nation’s semiconductor and artificial intelligence industries by fiscal year 2030. This ambitious initiative aims to stimulate a total of JPY50 trillion (approximately US$346 billion) in public and private investment over the next decade.

 

This significant funding commitment, separate from previously allocated funds, will be detailed in an upcoming economic stimulus package projected to generate a JPY160 trillion (approximately US$1.1 trillion) economic impact. The plan aims to bridge the gap with global leaders in chip technology, particularly in the crucial domain of AI-powered semiconductors. This strategic move reflects Japan’s commitment to ensuring its economic security in the face of global competition and the growing importance of advanced semiconductor capabilities.

 

The funding framework will utilize a variety of methods, including outsourcing, financial support, and legislative measures designed to enhance predictability and encourage private sector participation. The plan encompasses a broader range of semiconductor companies beyond the previously focused Rapidus initiative, reflecting a commitment to fostering a robust and diverse domestic semiconductor industry. The government assures that this substantial investment will not be financed through tax increases or deficit-financing bonds, with alternative funding mechanisms currently under consideration.

 

This bold investment strategy underscores Japan’s determination to remain a global leader in technological innovation and drive economic growth at both the national and regional levels. The plan aims to replicate the success of initiatives such as TSMC’s Kumamoto chip plant, fostering regional revitalization and creating new economic opportunities across the country. The government expects global chip demand to triple over the next 10 years, presenting a significant opportunity for Japan to capitalize on this growth.

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