Japan plans to seek "tens of billions of dollars in subsidies" for semiconductor projects! TSMC and Rapidus are expected to benefit from this
Tickmill Group
A key lawmaker from Japan's ruling party said Japan plans to secure an additional 1.49 trillion yen ($10 billion) in subsidies for two key semiconductor projects.
Yoshihiro Seki, chairman of Japan's Liberal Democratic Party's Semiconductor Strategy Promotion Parliamentarian Alliance, revealed in an interview on Wednesday (October 25) that the government will allocate up to 900 billion yen for Taiwan Semiconductor Manufacturing Company (TSMC)'s second factory in Kumamoto, southwest Japan; At the same time, 590 billion yen will be allocated for Japanese local chip company Rapidus.
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He also said that the Ministry of Economy, Trade and Industry has included these subsidies as part of the supplementary budget request for this fiscal year.
As with other budget items in Japan, the final amount may still change through discussions with the Finance Ministry.
This move shows that Japan is moving towards key technology fields such as semiconductors. Just this Monday, Japanese Prime Minister Fumio Kishida promised again in his speech that he would work hard to strengthen the supply chain related to semiconductors and decarbonization technologies; on Tuesday, Japanese Minister of Economy, Trade and Industry Yasunari Nishimura also expressed the hope that he would not fall into protectionism. Establish a supply chain and procurement framework.
Subsidy higher than normal level
It is understood that the second factory built by TSMC in Kumamoto City is expected to cost about 2 trillion yen. After the factory is completed, it is expected to produce 6-12 nanometer logic chips. These chips will be used in products such as electric vehicles. This factory may become an important semiconductor production base in Japan in the future.
Seki said that generally speaking, for such projects, government subsidies usually account for about one-third of the cost, and the planned 900 billion yen means that the government will bear more than one-third of the cost of TSMC's new factory.
To justify higher-than-usual subsidies for TSMC plants, Seki said the government would press Japan to provide additional incentives in exchange for TSMC's local help. This could include supporting TSMC in training Japanese engineers and conducting joint research with Japanese companies.
It is reported that Japan has currently promised to bear about half of the cost of TSMC’s first factory in Kumamoto, a subsidy of approximately 476 billion yen. In addition, the Japanese government has pledged to invest 330 billion yen in Rapidus, which aims to produce 2-nanometer logic chips in northern Hokkaido.Tickmill
