Japan Allocates $65 Billion to Compete in Tech Sector
date
Nov 12, 2024
damn
language
en
status
Published
type
News
image
https://www.ai-damn.com/1731413172852-202308091546512360_0.jpg
slug
japan-allocates-65-billion-to-compete-in-tech-sector-1731417045652
tags
Japan
Semiconductors
AI
Investment
China
summary
The Japanese government has announced a significant investment of over 10 trillion yen, approximately $65 billion, to bolster the semiconductor and artificial intelligence industries. This initiative aims to strengthen Japan's position in the global technology landscape, particularly against China, while fostering private and public investment.
Japan's Strategic Investment in Technology
The Japanese government, led by Prime Minister Ishiba Shigeru, has unveiled plans to invest over 10 trillion yen (approximately $65 billion) in the semiconductor and artificial intelligence sectors. This strategic move is aimed at enhancing Japan's competitiveness in the global technology race, particularly in light of the growing challenges posed by China.
Objectives of the Investment
Prime Minister Ishiba stated that the public funding will come into effect before the end of the fiscal year 2030. The initiative is expected to act as a catalyst for both public and private investments, with projections suggesting that it could attract over 50 trillion yen in additional funding over the next decade. According to a draft of the economic stimulus plan, this funding framework is designed to be distinct from the previously allocated 4 trillion yen and aims to contribute an economic impact of around 160 trillion yen to the Japanese economy.
Market Demand and Economic Growth
With global demand for semiconductors anticipated to escalate to 150 trillion yen in the next ten years, the new funding framework aims to provide greater certainty and support for private enterprises. This support will be available through various channels, including outsourcing, financial assistance, and legislative measures. The government aims to stimulate overall economic growth through active regional revitalization efforts, exemplified by the construction of a TSMC chip factory in Kumamoto.
Competition with China
China's investments in the semiconductor sector are formidable, leading the world in the number of semiconductor factories under construction. The nation is also ramping up support for its domestic chip manufacturers via substantial national investments. In comparison, President Biden's "Chips and Science Act" introduced in 2022 promises $39 billion in subsidies, alongside $75 billion in loans and guarantees, and tax credits of up to 25% to maintain competitiveness in this essential industry.
Innovative Financing Strategies
In its pursuit to bolster the semiconductor industry, the Ishiba government is exploring new financing avenues. A report from Nikkei on November 1 indicated plans to issue bonds backed by government-held assets, including NTT shares, to fund subsidies for semiconductor companies.
Commitment to Economic Security
Prime Minister Ishiba emphasized that the funds would not be raised through tax increases, and the government will collaborate with various departments to discuss the specific allocation of funds. These measures underscore Japan's commitment to enhancing investment as a means of securing economic stability amid increasing global competition in semiconductors and artificial intelligence.
Conclusion
Japan's ambitious investment plan reflects a proactive approach to ensuring its technological advancement and economic security in a rapidly evolving global landscape.
mage source: The image is AI-generated, authorized by Midjourney
Key Points
- The Japanese government commits to investing $65 billion over the next decade to support the semiconductor and AI industries.
- The new funding framework aims to drive over 50 trillion yen in public and private investments.
- The Ishiba government plans to support the chip industry through innovative methods such as issuing guaranteed bonds.