Japan is seeking to revitalize its semiconductor industry. The Japanese government provides billions of dollars in subsidies to its domestic chip industry.
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Japan has announced a new plan to revitalize the country’s semiconductor and artificial intelligence industries in a bid to regain its chip leadership.
Japanese Prime Minister Shigeru Ishiba said earlier this week that the proposal would provide support worth 10 trillion yen ($65 billion) or more through fiscal 2030.
“We will develop a new aid framework to attract more than 50 trillion yen in public and private investment over the next 10 years,” Ishiba said, adding that it would be part of Japan’s broader “revitalization” efforts.
The plan will form part of a comprehensive economic package to be finalized in November and will be funded through subsidies, investment from government agencies and debt guarantees. According to local media reports.
The move comes amid broader efforts by Japan to strengthen and diversify its semiconductor supply chain, with the government targeting triple sale By 2030, domestic chip production will exceed 15 trillion yen.
Domestic chip hero?
One likely beneficiary of the financing announced Monday will be Japan-based Rapidus, a state-backed chip business at the heart of the country. Chip revitalization efforts.
Rapidus was founded by the Japanese government in 2022 and has the backing of many Japanese companies including Toyota Motor and Sony Group, as well as a partnership with US technology giant IBM.
The company has received more than $2 billion in government support and aims to mass-produce cutting-edge 2nm logic chips by 2027.
Logic chips are used to process information and complete tasks within electronic devices. this State-of-the-art logic chip For technologies such as artificial intelligence, quantum computing and machine learning.
Rapidus Chairman Tetsuro Higashi It is said The company described the company as Japan’s “last chance” to regain its leading semiconductor position on the global stage as it looks to catch up with leaders such as Taiwan and South Korea.
In the 1980s, Japan was the world’s chip leader, accounting for more than half of the global semiconductor market.
However, the country began to lose its lead as foreign competitors emerged, e.g. British Semiconductor., now the world’s dominant contract chip manufacturer, South Korea’s Samsung.
Both Samsung and TSMC has Plans have been formulated to start commercial production of 2-nanometer wafers by 2025.
Meanwhile, the United States has become a major player in chip design, with players such as Intel and Micronwhile the Netherlands manufactures the world’s most advanced chip manufacturing equipment through its company ASML.
feasibility
Michael Yang, senior director of semiconductors at analyst and consulting firm Omdia, told CNBC that although Japan has lost its leadership in semiconductor production and manufacturing, it still leads in certain semiconductor materials and equipment.
Yang added that through chip subsidies, which are mainly used to boost manufacturing capabilities, China should be able to expand into other aspects of supply and strengthen its position.
Counterpoint Research semiconductor analyst Brady Wang said that despite this, it will still be an uphill battle for Japan to regain the chip market, requiring Rapidus to find a “shortcut” in chip design and production to reach the advanced level of leading semiconductor companies. level.
Rapidus representative stated The architecture of 2nm wafers is different from that of 3nm wafers, making the mass production of the former a “whiteboard challenge for all participants” and providing an excellent opportunity to enter the market.
However, in this effort, “subsidy is necessary but does not guarantee success,” Wang said, adding that it took TSMC more than a decade to catch up with global chip companies and build relationships with customers.
Ken Kuo, senior vice president of research at technology market intelligence company TrendForce, said: “Subsidies are only a basic requirement to enter the semiconductor industry, but success requires more support measures, such as talent, technology and strategic planning.”
Learn from the best
In addition to trying to build a dominant chip producer in Japan, the subsidies are also aimed at attracting global leaders that once took away its chip business.
With assistance from the Japanese government, chipmakers including TSMC, Samsung Electronics and Intel Corp have agreed to invest billions of dollars in Japan.
These companies are leaders in the production of storage chips used to store data, which are critical in data centers for artificial intelligence and cloud computing.
TSMC has announced plans Construction of a second factory in Japan prior to completion of the first factory.
Counterpoint’s Wang said attracting such companies to Japan can help the country quickly promote vertical integration of the entire supply chain and build its semiconductor ecosystem faster.
Japan also has Sign a cooperation agreement – Working with allies such as the US, UK, Taiwan and some EU countries – aims to drive research and development of next-generation semiconductors.
—CNBC’s Arjun Kharpal contributed to this report
