How Japan Proposes to Strengthen its Domestic Chip Industry
As global demand for chips surges, driven by advancements in AI and consumer electronics, countries are increasingly recognising the strategic importance of securing their supply chains.
On this wavelength, Japan seeks to reclaim its position in the semiconductor landscape, which it dominated in the 1980s but has since ceded to competitors like Taiwan and South Korea.
The Japanese government’s plan, which includes financial support exceeding 10 trillion yen (US$65bn), aims to bolster domestic chip production capabilities over several years.
The proposal will be presented during the upcoming parliamentary session and is part of a broader economic strategy to enhance Japan’s technological independence amid escalating global competition.
Japan’s focus on advanced chip production
The proposed funding specifically targets Rapidus, a joint venture established by the Japanese government and several domestic firms, including major players such as Toyota and Sony.
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TSMC
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Rapidus
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Sony Semiconductor Solutions
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Renesas Electronics
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Kioxia
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Toshiba
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Rohm Semiconductor
Rapidus aims to initiate mass production of advanced 2-nanometer chips by 2027 in Hokkaido, in collaboration with IBM and the Belgian research organisation Imec.
The significance of 2-nanometer technology lies in its ability to produce smaller, more efficient chips that can handle complex tasks more effectively than their predecessors.
According to Reuters, Japan’s government had previously allocated approximately 2 trillion yen (US$13bn) to support its semiconductor sector.
The latest proposal represents an escalation of these efforts as Japan seeks to enhance its competitiveness in the global market.
Meanwhile, the government’s comprehensive economic package, expected to be approved by cabinet on November 22, aims for a total investment of 50 trillion yen (US$0.325tn) in the semiconductor industry over the next decade.
The draft indicates that the economic impact of these investments could reach around 160 trillion yen, (US$1.04tn) underscoring the government’s commitment to revitalising this crucial sector.
As countries worldwide grapple with supply chain disruptions exacerbated by geopolitical tensions, Japan’s initiative reflects a growing trend among nations to bolster their domestic manufacturing capabilities.
