Japan has unveiled a substantial supplementary budget for the fiscal year ending March 2025, allocating ¥1.5 trillion ($9.9 billion) towards semiconductor and artificial intelligence development. This funding package marks a significant step in Japan's effort to bolster its technological prowess in the face of escalating global competition, particularly from China and the United States.
The budget is divided into two primary segments: ¥1.05 trillion is designated for research and development in next-generation chips and quantum computing, while ¥471.4 billion is aimed at enhancing domestic advanced chip production capabilities. This initiative is a component of Prime Minister Shigeru Ishiba's broader commitment, which promises over ¥10 trillion in support for chip and AI development through to the fiscal year 2030.
The cabinet's approval of this supplementary budget is now awaiting parliamentary ratification, which is expected before the year concludes. The injection of funds comes amid Japan’s strategic efforts to reclaim its status as a leader in semiconductor technology, viewing this sector as crucial not only for economic growth but also for national security. Policymakers have been vocal about the importance of semiconductors in advancing AI systems, thereby positioning Japan to address both industrial and defence needs.
Over recent years, Japan has allocated close to ¥4 trillion in various chip-related initiatives, reflecting a consistent commitment to reviving its semiconductor industry. Noteworthy investments include support for Taiwan Semiconductor Manufacturing Company (TSMC) in Kumamoto and the expansion of Micron Technology’s facility in Hiroshima, which focuses on advanced DRAM production.
A significant player in this initiative is Rapidus Corp., a domestic chipmaker that has received about ¥920 billion to set up its operational facilities in Hokkaido. Rapidus aims to commence mass production by 2027—a goal indicative of Japan's ambitious plans to rediscover its leadership in semiconductor manufacturing.
The Ministry of Economy, Trade and Industry (METI) has undertaken measures to fortify Japan's high-tech supply chain, having allocated ¥101.7 billion in subsidies for technology infrastructure projects funded by a previous budget. Notable among these initiatives is a joint venture between Denso Corp. and Fuji Electric Co., which has been approved for up to ¥70.5 billion in subsidies. This partnership anticipates investing ¥212 billion to enhance the production of silicon carbide wafers and power chips, vital for the growing electric vehicle market.
Japan's semiconductor strategy encompasses a wide range of applications, including power semiconductors through collaborations among top industrial players such as Toshiba Corp. and Rohm Co. Concurrently, the funding's focus on quantum computing underlines Japan's forward-thinking approach to maintaining its technological relevance.
As the country navigates its path forward, this concerted financial push signifies Japan’s strategic determination to utilise its existing capabilities in semiconductor manufacturing while fostering innovations in emergent technology sectors. The allocation of these funds will be directed by METI, though precise details regarding the distribution are still being deliberated, especially concerning investments in Rapidus.
Japan stands poised to leverage its unique position within the global semiconductor landscape, home to some of the leading manufacturers of semiconductor materials and equipment. The comprehensive funding strategy aims to cement Japan's technological future, ensuring that it remains competitive on the international stage.
Source: Noah Wire Services