Japan rolls out plan to support semiconductor industry

The Japanese government announced an ambitious financial support plan on November 2 to boost the country's semiconductor industry.

Rapidus của Nhật Bản ước tính rằng họ sẽ cần hơn 30 tỷ USD để đạt được mục tiêu sản xuất hàng loạt chip tiên tiến vào năm 2027. (Nguồn: asia.nikkei)

Japan's Rapidus estimates it will need more than $30 billion to achieve its goal of mass producing advanced chips by 2027. (Source: asia.nikkei)

The financing scheme will leverage assets such as shares in Nippon Telegraph and Telephone (NTT) to fund a multi-year programme aimed at encouraging private sector investment and ensuring sustainable growth for the industry.

The support program goes beyond subsidies and takes a multi-phased approach. In the first phase, semiconductor manufacturers will receive subsidies as they prepare for mass production. Once production milestones are reached, the government will shift to other forms of support, such as private sector investment and financial guarantees, continuing until around 2030.

The program will target semiconductor manufacturers such as Rapidus, which aims to begin mass production of advanced semiconductors in 2027, and Taiwan Semiconductor Manufacturing Co. (TSMC), which has a manufacturing plant in Kumamoto Prefecture. The main goal is to encourage private sector investment while reducing the financial burden on taxpayers.

Notably, the program will be funded through a special account, separate from the main budget, to ensure that it does not affect Japan's fiscal balance, with the goal of making it profitable by fiscal 2025. Funding will be provided through bridge bonds, with funds coming from dividends from the government's stakes in NTT and Japan Tobacco, as well as from the sale of shares exceeding the statutory minimum holding.

Rapidus is expected to need a total of 5 trillion yen (about $33 billion) to complete its mass production target by 2027, of which 4 trillion yen will be needed in funding on top of existing government support.

The program marks a shift in Japan’s approach to the semiconductor industry, moving away from direct cash injections through subsidies and toward a more predictable, long-term plan for private investors. New forms of funding, such as loans and investments, will help pay back the money through interest and dividends, creating a more sustainable financial model for the industry.

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