Japanese Government Gives Special Subsidy To Build Chip Factory, TSMC Taiwan First Receiver

The construction of a chip factory is one of the priorities in Japan. (photo: doc. unsplash)

JAKARTA – The Japanese government will create a scheme to subsidize the construction of domestic chip factories. The Nikkei reported on Monday, November 8, that a new plant planned to be built by Taiwan's TSMC is likely to be the first recipient of the subsidy.

The government will set aside several hundred billion yen under this year's additional budget to create a fund pool at NEDO, the government agency that promotes research and development in energy and industrial technology, the newspaper said.

Companies will qualify for the subsidy on the condition that they increase chip production in times of short supply, the Nikkei said without citing sources.

Prime Minister Fumio Kishida has vowed to make economic security a policy priority, including increasing domestic semiconductor production.

The Japanese government is likely to subsidize up to half of TSMC's estimated 1 trillion yen (IDR 126 trillion) investment to build a chip factory in Kumamoto, southern Japan, the Nikkei said. However, Japanese government officials did not comment on this news.

The plant in Kumamoto, southern Japan, is expected to produce semiconductors for cars, camera image sensors, and other products that have been hit by a global chip shortage, and are likely to start operating in 2024, the newspaper said.

The Japanese government will also submit the law to an extraordinary parliamentary session likely to be held in December, the Nikkei said.