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Japan govt adopts legislation for chip plant subsidies

  • December 6, 2021
  • , Jiji Press , 4:12 p.m.
  • English Press

Tokyo, Dec. 6 (Jiji Press)–Japan’s government at an extraordinary cabinet meeting Monday adopted legislation to financially support the construction of factories for cutting-edge semiconductors in the country.


The government will certify chip plant construction projects and provide subsidies from a fund to be newly set up. A plant to be built in Kumamoto Prefecture, southwestern Japan, by Taiwan Semiconductor Manufacturing Co. is expected to be the first to receive the support.


The bill to revise a related law will be submitted to the 16-day extraordinary parliamentary session convened Monday. The government hopes to put the revised law into effect by the end of March 2022.


Companies hoping to get the aid, which is expected to mainly cover the production of chips that are particularly important in terms of economic security, such as advanced logic semiconductors, will need to submit plans to construct or expand plants to the government. Such plans will be certified by the Ministry of Economy, Trade and Industry.


As conditions for approval, applicants will have to continue chip production for a certain period of time and meet requests for increasing production when the supply-demand balance is tight.


If approved, they will receive subsidies from a fund to be set up at the state-affiliated New Energy and Industrial Technology Development Organization, or NEDO, over several years. The subsidies can be used for plant construction and other capital spending programs.


The government has earmarked 617 billion yen in related funds under its fiscal 2021 supplementary budget.


The government will cancel the approval and require the return of the aid if recipient companies fail to meet the conditions.

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