Japan Announces Ambitious $65 Billion Investment Plan to Boost Chip and AI Industries

In an unprecedented move to establish itself as a leader in technology and innovation, Japan has unveiled a $65 billion initiative aimed at strengthening its chip and artificial intelligence (AI) industries. The plan, announced by Japanese Prime Minister Shigeru Ishiba, seeks to fortify Japan’s position within the global tech landscape by incentivizing domestic production and ensuring the security of its chip supply chain.

With recent global disruptions affecting chip supplies, particularly trade tensions between the United States and China, Japan is taking proactive steps to mitigate future vulnerabilities. The government’s strategic plan involves 10 trillion yen (approximately $65 billion) in subsidies and incentives to propel the Japanese tech sector forward by 2030. Central to this initiative is Rapidus, Japan’s chip foundry venture, which is slated to lead the production of cutting-edge chips from 2027 on the northern island of Hokkaido. Through partnerships with IBM and Belgium’s research powerhouse Imec, Rapidus will leverage advanced technology and expertise to position Japan at the forefront of next-generation chip production.

The Japanese government expects this massive investment to yield an economic impact of around 160 trillion yen. Additional legislative support for mass production, to be proposed in the upcoming parliament session, highlights Japan’s commitment to a robust technological ecosystem that caters to both domestic and international demands.

Interestingly, Prime Minister Ishiba announced that no deficit-covering bonds will be issued for this initiative, although exact details on funding sources remain forthcoming. Instead, the government is looking towards both public and private sector investment, with an overall goal of attracting 50 trillion yen over the next decade to bolster the chip industry and other technological ventures.

Additionally, to address the economic challenges impacting Japanese households, Ishiba’s administration has prioritized sustained wage growth, an agenda set to be discussed with business and labor unions later this month. With rising living costs placing pressure on consumers, the government hopes to achieve stable wage increases that will help balance consumption and contribute positively to the broader economy.

This comprehensive investment plan marks a significant step forward for Japan, reflecting a clear vision for a technologically secure and economically resilient future.