Japan to allocate over 10 trillion yen to support semiconductors

December 17, 2024 — Japanese Prime Minister Ishiba Shigeru recently stated the economic significance of the semiconductor industry and emphasized Japan’s “core role” in the global semiconductor supply chain. He used the example of TSMC’s chip factory in Kumamoto, Japan, to illustrate how large-scale projects attract local small businesses and stimulate regional and national economic revitalization.

Ishiba also revealed the government’s plan to allocate over 10 trillion yen (approximately $65 billion) by fiscal year 2030 to support the semiconductor and AI industries. The goal is to attract over 50 trillion yen in total public and private sector investment over the next decade.

Former ruling party lawmaker Akira Amari, who led Japan’s semiconductor strategy, stated that making Rapidus a chip manufacturer comparable to TSMC would reduce global supply chain risks. Rapidus, which began construction of its plant in Chitose, Hokkaido in 2023, aims to start large-scale production of advanced semiconductors by 2027.

Rapidus Chairman Tetsuro Higashi, former chairman of TEL, said that extreme ultraviolet (EUV) lithography equipment will be installed at the plant in December. The equipment, critical for producing the most advanced chips, is expected to be fully operational by March 2024, and trial production lines will begin to manufacture and deliver 2nm semiconductors. Despite progress, the company faces another challenge: raising additional funds. It is estimated that Rapidus will need 5 trillion yen to begin large-scale production.

Since its establishment, Rapidus has secured 7.3 billion yen in investment from eight Japanese companies, including Toyota, Sony, SoftBank, and Mitsubishi UFJ Financial Group. Banks such as Sumitomo Mitsui Banking Corporation, Mizuho Bank, and Mitsubishi UFJ Financial Group are considering an investment of 25 billion yen in 2025. Currently, the chip manufacturer relies heavily on government support, with Japan agreeing to provide 920 billion yen in subsidies and planning an additional 200 billion yen investment in fiscal year 2025.

According to SEMI forecasts, Japan’s semiconductor equipment investment is expected to reach $18.6 billion by 2028, triple the amount in 2024, with most of the investment coming from TSMC and Rapidus.