This Friday, Japan’s new Prime Minister Fumio Kishida announced the first supplementary budget after taking office, adding 36 trillion yen (approximately US$316 billion) in fiscal expenditure, the highest level in Japan’s historical supplementary budget. Among them, 774 billion yen (approximately US$6.8 billion) of funds has been set up as a special fund to support cutting-edge semiconductor manufacturers to fulfill Kishida Fumio’s promise to build Japan into a global chip factory during his election campaign.

The plan consists of three parts: 617 billion yen will be invested in the production of cutting-edge chips in Japan; 47 billion yen will be invested in the production of analog chips and power management chips; 110 billion yen will be used for the research and development of next-generation semiconductor materials.

It is reported that the Japanese government will allocate part of the 617 billion yen domestic investment to fund the semiconductor factory planned by TSMC and Sony Group in Kumamoto Prefecture. According to a previous report by the Nikkei News, the Japanese government will allocate funds for this new factory. About 400 billion yen. The remaining approximately 200 billion yen is used to support the addition of new factories by Micron Technology and Kioxia. The Ministry of Economy, Trade and Industry of Japan stated that it will provide up to one-third of the total investment required for the production of mature process chips.

In recent years, the Japanese government has vigorously promoted the strategy of revitalizing the semiconductor industry. Based on the traditional advantages of Japanese electronics, automobiles and semiconductor industries, combined with special financial subsidies, it has successfully absorbed TSMC to set up new factories in Japan.

Kishida Fumio told the media, "TSMC has recently attracted attention, but in addition to attracting US semiconductor manufacturers, etc., it is important to expand various possibilities in the private sector in the future."

It is reported that the Japanese government's financial support conditions are that the government subsidizes 50% of the new semiconductor factory costs in batches within a few years, and companies need to increase production at the government's request when the semiconductor supply and demand situation deteriorates. There are also reports that the government has also set out the conditions for prohibiting evacuation of factories within a certain period of time, and that semiconductors produced in Japan will be supplied to Japan first according to the situation.

Recently, the global market share of Japanese semiconductor companies has fallen to about 10%. In the "White Paper on Trade and Commerce" released in June, the Japanese government made the revival of the semiconductor industry a core issue of economic security. It plans to triple semiconductor sales within 10 years and strengthen technical cooperation with the United States.

Therefore, the currently approved budget is only the beginning of increasing investment in the semiconductor industry. Both the ruling party and the government of Japan have prioritized supporting companies to increase semiconductor production.