Prime Minister Fumio Kishida of Japan stated that his government is formulating legislation aimed at augmenting domestic investment in AI and semiconductor production.
What Happened: The proposed bill, which is expected to be presented to the Diet shortly, is designed to bolster research, development, and large-scale production of next-generation chips. Kishida made this announcement during a tour of the state-supported Rapidus Corp.‘s foundry in Chitose, Hokkaido, Business Insider reported on Wednesday.
Rapidus Corp. has plans to manufacture advanced 2-nanometer chips custom-made for customer designs. However, for full-scale mass production at Rapidus, Japan will need to ensure a steady supply of affordable and clean power sources. This initiative is being taken amid a growing rivalry between the U.S. and China, which is driving governments globally to produce their own semiconductors.
Why It Matters: Japan has been strategizing to triple its domestic semiconductor sales by 2030. The Tokyo government is now seeking to diversify its support for the country’s chip supply chain, which is deemed crucial for advancements in artificial intelligence. Public guarantees on loans to the sector may be extended.
Over the past three years, Japan has already allocated approximately ¥4 trillion ($26 billion) to rejuvenate its semiconductor sectors and promote digitalization. Up to ¥920 billion of this amount is earmarked for Rapidus’s endeavor to produce state-of-the-art chips and compete with Taiwan Semiconductor Manufacturing Co. TSM and Samsung Electronics Co.
Taiwanese chip companies have been expanding their operations in Japan, reshaping the global semiconductor industry. This was seen as a response to the evolving landscape of the global chip industry, with the U.S. aiming to curb China's advancements in cutting-edge semiconductors.
Currently, major tech giants like Nvidia NVDA and Apple AAPL heavily rely on TSMC for chips. A recent statement by GOP presidential contender Donald Trump sent shockwaves through the industry. Last week, Trump suggested that Taiwan should compensate the U.S. for its protection against China. His comments led to an 8% decline in shares of Taiwan-based AI chip giant TSMC, also known as Taipei's "crown jewel." TSMC's location in Taiwan, a territory claimed by China, places the tech industry and the future of AI in a precarious geopolitical situation.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
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