Since 2021, the Ministry of Economy, Trade and Industry (METI) has been implementing an ambitious strategy to revitalise Japan’s semiconductor industry, with investments already amounting to €28 billion. However, to bridge the gap with global industry leaders, additional billions will be required in the coming years.
One of the key projects in this strategy is Rapidus, a Japanese consortium set to receive government grants covering almost the entire initial investment of €12.5 billion for its semiconductor plant in Hokkaido, as part of a broader €30 billion plan. Tokyo has pledged a total of €25 billion in subsidies to triple semiconductor sales by 2030. METI has already allocated an additional €3.68 billion for 2024, including €312.5 million for research and development in back-end processes—the first such funding in Japan. Rapidus, also backed by private investment and additional financing, will not initially seek to compete with industry giants like TSMC and Samsung in large-scale production but will focus on highly specialised niche technologies.
Part of the initial budget will be used to purchase two EUV lithography machines from Dutch company ASML. To meet its goal of producing next-generation chips by 2027, the consortium must acquire the necessary tools within this year.
Japan’s efforts to establish an alternative global supply chain also involve strategic partnerships with the United States and Europe. In this context, Rapidus has partnered with IBM to develop 2nm semiconductors and has signed a memorandum of understanding with the Interuniversity Microelectronics Centre (IMEC), a leading European research centre.
Several foreign companies are already investing in Japan’s semiconductor industry revival. Intel, for example, launched a collaboration in May 2024 with 14 Japanese firms to automate chip manufacturing back-end processes. In April, the Semiconductor Assembly Test Automation and Standardization Research Association was established in Tokyo, led by Intel Japan President Kumimasa Suzuki, with the aim of implementing these technologies by 2028. OMRON Corporation and Murata Machinery (Kyoto) will focus on automated storage and transmission systems, while Yamaha Motors and Resonac Holdings will handle assembly and testing. Sharp Corporation will be responsible for developing industry guidelines.
Additionally, in July, Taiwan’s ASE Technology Holding signed a provisional agreement with the city of Kitakyushu (Fukuoka Prefecture) to purchase public land for constructing a new semiconductor plant.
Beyond strategic agreements, the Japanese government has introduced key measures to attract investment, including: subsidies for new semiconductor production plants; tax incentives, allowing companies investing in semiconductors to deduct up to 20% of corporate tax; technology transfer collaborations and joint investment initiatives.
Japan has also strengthened support for researchers in critical fields such as artificial intelligence, semiconductors, energy, and medicine. Funding has been extended to cover operational expenses, including travel and conference organisation costs. Particular focus will be given to international projects, with privileged collaborations with the United States, Australia, and Europe. Italy will participate through Ca’ Foscari University of Venice.
Funding comes from a €313.12 million fund established in 2022 and managed by the Ministry of Education, Culture, Sports, Science, and Technology (MEXT). From 2024 onwards, grants will be distributed progressively, reaching a total of €103.75 million by 2028.
Over 70% of funds from the Japan Science and Technology Agency and 50% of those allocated by the Agency for Medical Research will be directed towards creating networking opportunities for researchers at both national and international levels.
