Japan Will Invest $500 Million to Revive Semiconductor Industry

As it strives to reclaim itself as a leading manufacturer of cutting-edge chips, Japan announced on Friday that it would contribute an initial 70 billion yen ($500 million) to a new semiconductor initiative led by tech companies, including Sony Group Corp and NEC Corp.

Semiconductors are going to be a critical component for the development of new leading-edge technologies such as AI, digital industries and in healthcare.” 

– Minister of Economy

According to officials, the new chip business, Rapidus, would start producing chips in the second part of this decade. A trade and industry representative who spoke to Reuters on the condition of anonymity because he was not allowed to talk to the media said that Japan’s government would likely spend billions of dollars more in the future and wanted to entice American and European chip-related businesses, such as International Business Machine Corp (IBM) and ASML Holdings, to the initiative.

Japan is trying to restore its chip manufacturing base as trade tensions between the United States and China worsen and Washington limits Beijing’s access to crucial semiconductor technology. It wants to ensure that its automakers and IT businesses have essential components and that it has the cutting-edge semiconductor technology needed to support emerging industries like artificial intelligence (AI). Japan, which previously produced more than half of the world’s semiconductors, is also worried that China would try to seize control of Taiwan.

The Japanese government has made financial help available to attract international chip companies to establish factories in Japan in an effort to revitalize chipmaking. The world’s largest manufacturer of logic chips, Taiwan Semiconductor Manufacturing Co (TSMC), received 400 billion yen from it last year to help develop a factory in Kumamoto prefecture that would produce semiconductors for Sony and auto parts manufacturer Denso Corp. 

The new chip collaboration is a further example of Japan’s expanding technological partnership with the United States and the country’s next step in its semiconductor ambition.

Source: Reuters