TOKYO, JAPAN – Japan’s Industry Ministry will nearly quadruple budgeted support for advanced semiconductors and artificial intelligence to about ¥1.23 trillion (S$10.1 billion) in the fiscal year starting April, bolstering the nation’s frontier tech amid U.S.-China rivalry.
Prime Minister Sanae Takaichi’s Cabinet approved the plan on December 26, lifting the Ministry of Economy, Trade and Industry’s overall budget by 50% to ¥3.07 trillion. Parliament will debate the initial proposal in the new year. The surge aims to secure supply chains for critical technologies as global tensions persist despite a trade war lull.
Shifting from ad-hoc extra budgets, most new chip and AI funding will flow through regular allocations for stability. Semiconductors get ¥150 billion for state-backed Rapidus venture, raising cumulative government investment to ¥250 billion.AI receives ¥387.3 billion for domestic foundation models, data infrastructure, and “physical AI” enabling robotic control. Broader priorities include ¥5 billion for key minerals like rare earths and ¥122 billion for next-generation nuclear power in decarbonisation efforts.
Additionally, ¥1.78 trillion in special bonds will aid Nippon Export and Investment Insurance in backing Japanese U.S. investments under bilateral trade pacts. This strategic ramp-up positions Japan to reclaim semiconductor prowess while advancing AI sovereignty in a competitive landscape.