(Bloomberg) -- Japan is allocating another ¥1.5 trillion ($9.9 billion) to boost its chip and artificial intelligence endeavors including moonshot foundry project Rapidus Corp.
The government’s extra budget for the fiscal year to March sets aside ¥1.05 trillion to develop and research fields related to next-generation chips and quantum computers and another ¥471.4 billion to support domestic advanced chip production. No decision has been made on how much of that will go to Rapidus, according to the Ministry of Economy, Trade and Industry.
Japan, home to some of the world’s biggest semiconductor materials and equipment makers, is fighting to keep up in a global spending spree on cutting-edge tech led by China and the US. Policymakers believe chips in particular hold the key to developing superior artificial intelligence and national security.
The supplementary budget allocation is part of the more than ¥10 trillion of fresh support Prime Minister Shigeru Ishiba has pledged for chips and AI by fiscal 2030. Domestic semiconductor production is critical for Japan’s economic security, he and cabinet members have said. The additional budget was approved by Japan’s cabinet Friday and is expected to pass parliament by the end of the year.
Tokyo has earmarked around ¥4 trillion of chip-related support over the last three years, committing billions of dollars to Taiwan Semiconductor Manufacturing Co.’s factory in Kumamoto, southern Japan, as well as to Micron Technology Inc.’s expansion at its Hiroshima plant to make advanced DRAM, including high-bandwidth memory. The government has also set aside about ¥920 billion for Rapidus’ factory in Hokkaido.
Rapidus, which is attempting to build leading-edge chipmaking capabilities from scratch, relies heavily on public support. It targets mass production in 2027.
Separately, out of funding secured in last year’s extra budget, METI approved subsidies worth a total ¥101.7 billion for projects it said would help shore up the country’s fragmented high-tech supply chain. As much as ¥70.5 billion of that would go to Denso Corp. and Fuji Electric Co.’s joint push to invest a total ¥212 billion to boost production of silicon carbide wafers and power chips, used in electric cars. The ministry last year approved subsidies to Toshiba Corp. and Rohm Co., which are collaborating to jointly produce power semiconductors.
--With assistance from Takashi Umekawa.
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