Japan to allocate $13 billion for chip industry

The Japanese government is set to allocate approximately 2 trillion Yen ($13 billion) to support its chip industry, signaling a concerted effort to regain prominence in this crucial sector. Japan, known for chipmaking tools and materials, aims to revive its manufacturing capabilities by providing subsidies to chipmakers for capacity expansion.

The funds, designated through a supplementary budget for the current fiscal year, are expected to assist Taiwanese chipmaker TSMC and chip foundry venture Rapidus. Rapidus, focused on manufacturing cutting-edge chips in Hokkaido, stands to benefit from Japan's strategic support.

This chip industry allocation is a component of Prime Minister Fumio Kishida's broader 13.1 trillion Yen spending commitment outlined in the 2023/24 extra budget, which received government approval on Friday.

To finance this substantial spending, Japan plans to issue close to 9 trillion Yen ($59.8 billion) in bonds, prompting concerns about the potential impact on the country's escalating debt.