Seki: If Japan alone doesn’t do anything, it won’t be able to attract top chip companies from the rest of the world. — Bloomberg
TOKYO: The Japanese government will pay for a significant part of a second Taiwan Semiconductor Manufacturing Co (TSMC) factory in southern Kumamoto, according to the leaders of the ruling party’s lawmaker coalition on chips.
Giving no support will be out of the question after the government pledged to shoulder half the cost of the first Kumamoto plant, said Akira Amari and Yoshihiro Seki, chairman and secretary-general of the Liberal Democratic Party’s group on semiconductors.
Amari said around one third of the cost is the norm for these types of projects, and the amount of support for the first was unusually large.
The subsidies will be part of Japan’s efforts to revive its domestic chip-making industry, a sector that’s viewed as crucial for growth and economic security, Amari said.
“This is a national strategy,” Amari said in an interview in here.
“We are facing the kind of choice that will set our course over the next decades. Are we going to be a receiver of chips or a provider? Which is better? We have no choice but to take on this challenge, regardless of the outcome.”
Whether or not the government would also pay for half of the second TSMC plant would depend on what type of chips to be made there, and how much of a wider economic impact it could generate in the region, Seki said.
For example, the government would be more supportive if TSMC plans to train many Japanese engineers through its own more technically advanced workers, he added.
“The plant will certainly boost the economy and we will back it,” Seki said in a separate interview on Wednesday here.
“Around the globe, governments are pouring in support.
“If Japan alone doesn’t do anything, it won’t be able to attract top chip companies from the rest of the world.”
The lawmakers also said they would like to see at least one trillion yen (RM32bil) of chip-related support in an extra budget this year, which would likely be compiled toward the end of the calendar year.
“Investments in the trillions of yen are the global standard when it comes to chips,” Amari said.
“We will secure a substantial budget amount.”
While the second TSMC plant hasn’t officially been announced by the company, aid for it could be part of that budget, Seki said.
Money could also go to legacy and power semiconductor production in need of support.
TSMC chairman Mark Liu said in June that the company is in discussions with Japan over subsidies for a second facility, which might be located alongside its current plant in Kumamoto.
If the additional support in the extra budget materialises, Japan will be largely on track with its plan to invest about 10 trillion yen (RM320bil) in semiconductors over the span of a decade. Prime Minister Fumio Kishida had made that intention clear last year.
So far, about 1.76 trillion yen (RM55.9bil) has been set aside for the nation’s chip and digital strategy that was created in 2021 and revised this year, according to the economy ministry.
Of that total, 1.2 trillion yen (RM38bil) is for semiconductors, 500 billion yen (RM15.9bil) for storage batteries and 60 billion yen (RM1.9bil) for software-related initiatives.
Japan is aiming to triple the sales of domestically produced semiconductors to more than 15 trillion yen (RM476.6bil) by 2030. — Bloomberg
