Japan to quadruple spending support for chips and AI in budget to $10 billion
Sign up now: Get ST's newsletters delivered to your inbox
Japan has earmarked 150 billion yen for state-backed chip venture Rapidus, bringing the cumulative government investment in the venture to 250 billion yen.
PHOTO: BLOOMBERG
TOKYO – Japan’s Industry Ministry is set to nearly quadruple its budgeted support for cutting-edge semiconductors and artificial intelligence (AI) development to about 1.23 trillion yen (S$10.1 billion) for the fiscal year starting in April.
Overall, the Ministry of Economy, Trade and Industry’s budget rose by about 50 per cent from the previous year to 3.07 trillion yen, largely due to the jump in chips and AI spending.
After Prime Minister Sanae Takaichi’s Cabinet signed off on it on Dec 26, the government’s initial budget plan will be debated in Parliament in the new year.
The jump in chips and AI spending comes at a time when Japan is trying to strengthen its capacities in frontier technology, as the US and China race ahead. As the world’s two largest economies remain on tense terms despite a lull in their trade war, Japan is also trying to secure better supply chain access for key technologies.
Starting with the fiscal year beginning in April, the ministry also plans to secure most of the additional funding for chips and AI in regular budgets, instead of through the more ad-hoc approach of funding it through extra budgets later in the year. That is expected to provide more stable funding to the sectors.
For semiconductors, the ministry has earmarked 150 billion yen for state-backed chip venture Rapidus, bringing the cumulative government investment in the venture to 250 billion yen.
For AI, 387.3 billion yen is being marked for the development of domestic foundation AI models, strengthening data infrastructure and “physical AI”, in which AI controls robots and machinery.
In the broader budget, 5 billion yen is being set aside for securing key minerals, including rare earths. For decarbonisation, 122 billion yen is earmarked for areas such as the development of so-called next-generation nuclear power plants.
Some 1.78 trillion yen of special bonds will also be issued to help state-backed Nippon Export and Investment Insurance support Japanese investment in the US as part of the two countries’ trade agreement. BLOOMBERG
