Japan unveils $65 bln plan to aid domestic chip industry

Japanese Prime Minister Shigeru Ishiba has unveiled a $65 billion plan to boost the country's chip and artificial intelligence industries via subsidies and other financial incentives. The program includes subsidies, tax breaks, and substantial grants to chipmakers, fueling R&D and production capacity in areas like advanced manufacturing, materials, and artificial intelligence.

The plan, which will provide support worth 10 trillion yen ($65 billion) or more by fiscal 2030, comes as countries look to strengthen control over their chip supply chains after global shocks including trade tensions between the United States and China.

This move positions Japan to become a leader in an industry where global demand is surging—spanning automotive, consumer electronics, and telecommunications. As semiconductors become essential to technological infrastructure and national security, Japan’s plan mirrors similar investments made by countries like the U.S., China, and the European Union.

They are specifically targeting foundry venture Rapidus and other suppliers of chips for artificial intelligence. According to the draft, the government expects the economic impact to total around 160 trillion yen.

With rising geopolitical tensions and a global chip shortage highlighting vulnerabilities, Japan's approach underscores its commitment to industrial sovereignty. Notably, major Japanese firms like Sony and Kioxia, as well as global players such as Taiwan Semiconductor Manufacturing Co. (TSMC), are set to benefit from these incentives, especially for initiatives that align with Japan’s broader economic goals.

Japan’s strategy emphasizes self-reliance and global competitiveness amid mounting pressures in the semiconductor supply chain. By ramping up production and establishing a robust chip ecosystem, Japan seeks to protect itself from supply disruptions that have previously hampered sectors like automotive manufacturing.

Overall, Japan’s commitment to strengthening its semiconductor capabilities not only reflects its industrial ambitions but also signals a reshaping of global chip dynamics, potentially setting a new standard for state-led tech investment amid evolving market demands.