Japan Plans to Invest $65 Billion to Boost Its Chip Industry

[Nomad76]

Japan has proposed a $65 billion (or more) plan to strengthen the semiconductor and AI industries in the country through grants and financial support by fiscal year 2030. The government plans to present this proposal at the next parliamentary session. The draft includes support for mass production of next-generation chips, focusing on AI chipmakers such as Rapidus, the government estimates an economic impact of about 160 trillion yen from this investment. Rapidus plans to start mass production of advanced chips in Hokkaido from 2027 and will work with IBM and Belgian research organization Imec.

According to the report from Reuters, Prime Minister Shigeru Ishiba said the government would not issue deficit-financing bonds to fund the support plan, although specific financial details are not yet known. The new initiative builds on last year's 2 trillion yen investment in the chip industry, and it is part of a broader economic package. Expected to be approved by the Cabinet on November 22, the plan calls for combined public and private investment in the semiconductor industry of more than 50 trillion yen over the next decade.



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[Assimilator]

Took Japan long enough to wake up, but after handing their semiconductor mastery to Taiwan and South Korea in the 90s, it's going to be difficult to claw back marketshare - especially if they hope to compete on leading-edge nodes. Not to mention that there's always gonna be a pay gap between those countries and Japan that's going to make fabbing far more expensive in the latter. For that reason far larger subsidies are going to be required if first-world countries in general hope to get private companies to actually be serious about domestic semiconductor manufacture; I'm talking defense-budget-percentages of GDP.

 

[Nomad76]

Took Japan long enough to wake up, but after handing their semiconductor mastery to Taiwan and South Korea in the 90s, it's going to be difficult to claw back marketshare - especially if they hope to compete on leading-edge nodes. Not to mention that there's always gonna be a pay gap between those countries and Japan that's going to make fabbing far more expensive in the latter. For that reason far larger subsidies are going to be required if first-world countries in general hope to get private companies to actually be serious about domestic semiconductor manufacture; I'm talking defense-budget-percentages of GDP.

Japan is late at the party, that's true. However, at least they promise to "be there" and seem not to rush. Give them 5 to 8 years and we might start seeing some action

 

[TechLurker]

Took Japan long enough to wake up, but after handing their semiconductor mastery to Taiwan and South Korea in the 90s, it's going to be difficult to claw back marketshare - especially if they hope to compete on leading-edge nodes. Not to mention that there's always gonna be a pay gap between those countries and Japan that's going to make fabbing far more expensive in the latter. For that reason far larger subsidies are going to be required if first-world countries in general hope to get private companies to actually be serious about domestic semiconductor manufacture; I'm talking defense-budget-percentages of GDP.

Japan didn't hand their mastery to Taiwan and South Korea; they lost it due to the US denying them EUV licensing due to fears over how dominant Japan was in early semiconductor production and development. For what it's worth though; Japan still produces some of the highest quality electronics components such as capacitors and MOFSETs, and Japan is still the only real source for exotic chemicals needed in chip manufacturing (hence why the new Korean administration toned down the WWII-reparation rhetoric against Japan, in order to unfreeze the restriction Japan placed on them that sent the cost of the chemicals skyrocketing for Korean fabs).

Canon and Nikon both tried applied for EUV licensing alongside Intel, SVG, and ASML, but the US denied Japan's requests while granting it to the other 3. Hence Japan has been spending the better part of the decades trying to develop a cost-effective equivalent as well as making a breakthrough on EUV themselves, which is why not long ago that novel, non-EUV production method that allows for up to 3mm chip fabbing was headline-making, as Japan finally found a working non-EUV means of producing semiconductors at such a small scale. Sure, it's not bleeding edge like what TSMC, Intel, and Samsung are chasing, but it's also not subject to export restrictions demanded by the US, and any foreign fab that chooses to adopt it are also not beholden to restrictions demanded by the US on products produced by said equipment either. However, it also requires a different fab layout to accommodate the non-EUV design, so not many companies might want to make the switch.

It's how ASML became a giant monopoly when the other licensees gave up fab equipment production. It bought out one of the licensees (SVG) and reportedly worked out a sweetheart deal with the US to provide equipment at a lower lower cost in exchange for the US not granting other fab production companies an EUV license, despite later requests from foreign companies from Korea and Japan on getting an EUV license from the US.

China for its part is just reverse-engineering old ASML machines they managed to sneak into their country, and even if it's a hodgepodge of different machines put together, they are making some advancements as-is.

 

[R0H1T]

Interesting background that, the US has used tariffs, licenses & of course the dreaded 3 letter word to block competing industries/nations in the past! So this hardly new but looks like high end "chips" are the new arms race now.

 

[Nomad76]

China for its part is just reverse-engineering old ASML machines they managed to sneak into their country, and even if it's a hodgepodge of different machines put together, they are making some advancements as-is.

Also, SK-based semi (i.e. SK Hynix) usually sells outdated manufacturing lines/nodes to China.

 

[Assimilator]

US denying them EUV licensing

This literally never happened; Japan is one of the few players that produces EUV machines. They got out of semiconductors and into EUV because the latter was more lucrative and outsourcing fabrication to South Korea and Taiwan was cheaper than building and maintaining and constantly upgrading their own fabs. Simple economics, not conspiracy theories.

 

[user556]

This literally never happened; Japan is one of the few players that produces EUV machines. They got out of semiconductors and into EUV because the latter was more lucrative and outsourcing fabrication to South Korea and Taiwan was cheaper than building and maintaining and constantly upgrading their own fabs. Simple economics, not conspiracy theories.

TechLurker is correct. And you're not actually disagreeing either. Japan has forged its own path because it was denied that licence back in the 1990's.

Intel, for their part, never seemed to do anything with the licence they were granted.