27 Nov 2023 -

Japan invests $13 billion to revitalise its chip industry

Tokyo Japan Electronics

In a strategic move to revive its position in the global semiconductor market, the Japanese government has announced a substantial investment of approximately 2 trillion yen ($13 billion). This funding, aimed at rejuvenating Japan’s chip industry, forms part of a wider strategy to restore the nation’s former prominence in this critical sector, according to Bloomberg.

Once a leading provider in the realm of chipmaking tools and materials, Japan has seen its manufacturing edge diminish over recent decades. In response, the government’s latest financial commitment seeks to bolster the sector, including offering subsidies to chipmakers for expanding their capacity.

A significant portion of this investment will be channeled into supporting major players in the chip industry. Notably, the Taiwanese chipmaker TSMC and the chip foundry venture Rapidus are expected to benefit from this funding. Rapidus, in particular, has ambitious plans to manufacture cutting-edge chips in Hokkaido, Japan.

This financial support for the chip industry is a key element of Prime Minister Fumio Kishida’s larger spending plan. The total expenditure, amounting to 13.1 trillion yen, was approved as part of the 2023/24 extra budget. To facilitate this level of spending, Japan is preparing to issue nearly 9 trillion yen ($59.8 billion) in bonds. However, this move has raised concerns about the potential impact on the nation’s already significant debt.

For the global electronics industry, Japan’s renewed focus and investment in its semiconductor sector signal a pivotal effort to regain a competitive edge. This development not only represents Japan’s commitment to technological advancement but also highlights the ongoing global competition and strategic importance of the semiconductor industry.

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