(Bloomberg) — Prime Minister Fumio Kishida’s government is drafting legislation to boost more investment in the country’s chip manufacturing capacity.
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The government plans to present “as soon as possible” a bill to the Diet that would support the research and development of next-generation chips and their mass production, Kishida told reporters.
“Domestic investment in AI and semiconductors needs to expand and continue,” Kishida said during a visit to the state-backed Rapidus Corp. foundry in Chitose, Hokkaido, on Wednesday. “The government will secure the necessary financing to provide systematic, large-scale support for priority investments that include mass production and R&D over several years.”
Tokyo said it will diversify support for the country’s chip supply chain, which it sees as critical to catching up on artificial intelligence. Options may involve extending public guarantees on loans to the sector. Rapidus is the country’s most ambitious effort in the sector yet, with plans to manufacture next-generation 2-nanometer chips that would be tailored to customer designs.
To enable large-scale mass production at Rapidus, Japan will also need to ensure a stable supply of clean and cheap energy sources, Kishida said. “We want to explore ways to protect these decarbonized energy sources.”
Intensifying rivalry between the US and China is spurring governments around the world to produce their own semiconductors, which are crucial to the operation of automobiles, power plants and weapons systems, as well as consumer electronics. The US has also promised billions of dollars to chipmakers.
Japan has already allocated around 4 billion yen ($26 billion) over the past three years to recharge its semiconductor sectors and promote digitalization. Of that, up to 920 billion yen is earmarked for Rapidus’ bid to produce next-generation chips and compete with Taiwan Semiconductor Manufacturing Co.
Although it is home to many of the world’s leading manufacturers of chip equipment and materials, Japan has lost ground in the high-margin areas of memory and logic chip design and manufacturing.
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