Tech boost: A view of Mount Fuji and Tokyo skyline at dusk. The government won’t raise taxes to fund new frameworks in AI and the semiconductor segements, according to said Industry Minister Muto. — Getty Images
TOKYO: Japanese Prime Minister Shigeru Ishiba is pledging more than US$65bil of fresh support for the nation’s semiconductor and artificial intelligence (AI) sector as Tokyo looks to keep up with a global spending spree on cutting-edge tech.
Ishiba said he hoped public aid of more than 10 trillion yuan (US$65bil) for the sector by fiscal 2030 would serve as a catalyst to generate public and private investment of more than 50 trillion yuan over the next 10 years.
The new funding framework, separate from previously earmarked funds worth roughly four trillion yuan, is expected to be part of an upcoming economic stimulus package that will help Tokyo narrow the gap with global powers on chip support.
The United States and its allies are racing to keep ahead of China in AI-powering semiconductor capabilities, a domain that policymakers now see as essential for economic security.
President Joe Biden’s 2022 Chips and Science Act promises a total of US$39bil in grants for chipmakers as well as loans and guarantees worth an additional US$75bil plus tax credits of up to 25%.
However, the amount of money that Beijing is pouring into the sector likely dwarfs the United States spending.
China, which leads the world in the number of chip plants under construction, according to estimates, has been beefing up what’s known as the Big Fund to oversee state investments in companies such as local chipmaking champions Semiconductor Manufacturing International Corp and Huawei Technologies Co.
Speaking at a press briefing after winning a vote in parliament to stay on as premier, Ishiba said he wanted to spread positive examples of regional revitalisation like TSMC’s chip plant in Kumamoto across the nation.
The Prime Minister said he would discuss the funding of the plans with the various ministries, but he wouldn’t pay for the measures through deficit-financing bonds.
The government won’t raise taxes to fund the new framework, either, Japan’s Industry Minister Yoji Muto said, adding that details are still being hammered out.
Earlier local media reports suggested the government was looking for a new way of providing funding for Japan’s semiconductor sector.
Ishiba’s government is planning to issue bonds backed by assets it holds, including NTT shares, to provide subsidies to semiconductor companies, the Nikkei newspaper reported on Nov 1.
Japan has earmarked about four trillion yuan in previous extra budgets to revive its chip sector, including 920 billion yuan for Rapidus Corp in Hokkaido.
Rapidus aims to mass produce advanced logic chips by 2027.
The new framework will be separate from the four trillion yuan, Muto said.
“Chips are not limited to Rapidus,” Muto said.
“The process will be about considering how we will approach the next-generation semiconductor market from now on.” — Bloomberg
