Japanese Prime Minister Shigeru Ishiba announced a $65 billion initiative on Monday to strengthen Japan’s chip and artificial intelligence sectors through subsidies and various financial incentives. The program, set to deliver support totalling 10 trillion yen (approximately $65 billion) by the fiscal year 2030, reflects a global push by nations to secure greater control over chip supply chains amid disruptions like the trade tensions between the United States and China.
According to a draft reviewed by Reuters on Monday, Japan’s government plans to present a proposal, including legislation to facilitate the mass production of next-generation chips, at the upcoming parliamentary session. The proposal specifically focuses on supporting the chip foundry venture Rapidus and other suppliers of AI chips. As outlined in the draft, the government anticipates an economic impact of approximately 160 trillion yen.
A deficit-covering bond is issued to compensate for a state revenue shortfall. Last year, the Japanese government revealed plans to invest around 2 trillion yen in support of its semiconductor industry.
And now the latest initiative, included in the government’s broad economic package set for cabinet approval on Nov. 22, proposes a total investment of 50 trillion yen from public and private sectors in the chip industry over the next decade.
Japan’s newly elected PM Ishiba stated that the government intends to meet with business and labour union representatives later this month to discuss next year’s annual wage negotiations. Ensuring consistent wage growth has been a government priority, as rising living costs impact households and could affect consumption and the broader economy.
