Japanese Prime Minister Ishiba Shigeru recently announced that the government will invest over 10 trillion yen (approximately $65 billion) to support the nation's semiconductor and artificial intelligence industries. This move aims to help Japan secure a competitive edge in the global technology race, especially in the urgent competition with China.

AI Robot Investment

Image source: The image is AI-generated, authorized by Midjourney

Ishiba stated that this new public funding will be in place before the fiscal year 2030 and is expected to act as a catalyst for public and private investments, potentially attracting over 50 trillion yen in the next decade. According to the economic stimulus plan draft seen by reporters, this funding framework will be separate from the previously allocated approximately 4 trillion yen, aiming to bring about an economic impact of around 160 trillion yen to Japan.

Currently, global demand for semiconductors is projected to grow to 150 trillion yen over the next decade. Therefore, the new framework aims to provide greater certainty and support for private enterprises through various means such as outsourcing, financial support, and legislative measures. The Japanese government hopes to promote overall economic growth through active regional revitalization examples, such as the TSMC chip factory in Kumamoto.

Meanwhile, China's investment in the semiconductor sector is equally formidable. Data shows that China leads the world in the number of semiconductor factories under construction and is increasing support for domestic chip manufacturers through national investment. In contrast, President Biden's "Chips and Science Act" introduced in 2022 promises $39 billion in subsidies, along with $75 billion in loans and guarantees, and up to 25% tax credits, to maintain competitiveness in this crucial field.

The Ishiba government is also seeking new financing avenues to provide funds for the semiconductor industry. According to a November 1 report in the Nikkei, the government plans to issue bonds backed by its holdings (including NTT shares) to provide subsidies for semiconductor companies.

Under the new framework, Ishiba emphasized that the funds will not be raised through tax increases and will also discuss the specific use of funds with various departments. These measures signify Japan's commitment to increasing investment to ensure economic security in the global competition for semiconductors and artificial intelligence.

Key Points:

🌟 The Japanese government commits to investing $65 billion over the next decade to support the semiconductor and AI industries.

💡 The new funding framework aims to drive over 50 trillion yen in public and private investments.

🚀 The Ishiba government plans to support the chip industry through innovative methods such as issuing guaranteed bonds.