The Japanese government will offer more than ¥10 trillion ($65bn) in public funding for the semi-conductor and artificial intelligence (AI) sectors until March 2031, aiming to bolster domestic investment.
The government is shaping a new policy to support the chip and AI industries, Prime Minister Shigeru Ishiba said on 11 November, adding that the fund is aimed at stimulating public and private entities to invest ¥50 trillion in the sectors over the next decade.
This forms part of Ishiba's policy to revitalise the Japanese economy, which he believes is necessary to boost domestic and foreign investment.
The country needs more investments similar to that by Taiwan Semiconductor Manufacturing (TSMC), Ishiba said, referring to TSMC's project in south Japan's Kumamoto prefecture. The Taiwanese manufacture built its first fabrication plant in Japan in 2024 and is expecting to start volume production by the end of the year. The company is also planning to build another facility in Kumamoto, targeting commissioning by the end of 2027.
Strengthening financial support for the chip industry is in line with the economic policy outlined by the former government under Fumio Kishida. The previous administration allocated ¥3.9 trillion in subsidies, including for TSMC's investments, over the past few years.
The ¥10 trillion fund will be a new financial scheme in addition to the ¥3.9 trillion chip subsidy, minister for economy, trade and industry Yoji Muto said on 12 November.
The trade and industry ministry is also attempting to help industries introduce generative AI as part of the country's wider digital transformation policy. Lingering labour shortages have prompted the country to transform its economy into a more productive system, with expanded use of digital technologies.
The government is still in discussions around how to generate the ¥10 trillion fund, according to Muto, adding that the country is not planning to issue government bonds or increase taxes.
