Prime Minister Fumio Kishida Plans Legislation to Boost Domestic Semiconductor Production
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- 25 Jul 2024
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Japanese Prime Minister Fumio Kishida announced on Wednesday his intention to introduce legislation to support the domestic production of advanced semiconductors. This initiative aims to help manufacturers secure the necessary funding for mass production of next-generation chips, which requires substantial investment.
"I will be seeking the early submission to parliament of a bill necessary for the mass production of next-generation chips," Kishida stated after inspecting a Rapidus Corp factory under construction in Hokkaido, northern Japan. He emphasized that the government would back the chip industry's investment and research and development efforts "on a large scale and systematically."
To further support the domestic chip industry, the government is considering additional funding and guarantees on loans for companies in this sector. The Economy, Trade and Industry Ministry has already pledged 920 billion yen in subsidies to Rapidus to promote technologies crucial for Japan's economic security.
Rapidus, a government-backed venture established in 2022 by eight major Japanese companies, including Toyota Motor Corp and Sony Group Corp, is currently constructing a new plant in Chitose, Hokkaido. The company aims to begin manufacturing state-of-the-art 2-nanometer semiconductors with technical support from U.S. tech giant IBM Corp by 2027. Rapidus estimates it will need about 5 trillion yen to complete the Hokkaido plant and start mass-producing the chips.
Kishida's administration believes that the development and production of advanced semiconductors will drive regional economic revitalization and wage growth. In addition to supporting domestic chip companies, the government is also providing up to 1.2 trillion yen for Taiwan Semiconductor Manufacturing Co (TSMC) to build two factories in Kumamoto Prefecture, southwestern Japan.
This strategic move is part of Japan's broader efforts to enhance its technological capabilities and secure a stable supply of advanced semiconductors, which are critical for various industries, including automotive and electronics.
