Ministry of Economy, Trade and Industry requests an increase in the semiconductor budget in this year’s supplementary budget
The Asahi Shimbun reported on the 12th, citing multiple government officials, that Japan’s Ministry of Economy, Trade and Industry is considering budget support worth a total of 3.4 trillion yen (about 30.5534 trillion won) to foster the semiconductor industry.
The Ministry of Economy, Trade and Industry has decided to reflect the semiconductor support budget in this year’s revised budget (supplementary budget), which will support the economic measures to be released within this month.
In this regard, the Ministry of Economy, Trade and Industry is expanding the three funds already created by the Ministry of Finance, including the ‘Post-5G Information and Communication System Base Strengthening Research and Development Fund’, ‘Specified Semiconductor Fund’, and ‘Stability Supply Securing Support Fund’, to support semiconductor production and development. is requesting.
In addition to providing nearly 600 billion yen (approximately KRW 5.3917 trillion) in support to Lapidus, a government-run company aiming to localize next-generation semiconductors through an increase in semiconductor funds, 900 billion yen (approximately KRW 5.3917 trillion) will be provided to a factory being built in Japan by Taiwan’s TSMC, the world’s largest semiconductor contract manufacturing company. It is reported that subsidies exceeding 700 billion yen (approximately 6.2904 trillion won) will be provided to existing semiconductors such as image sensors produced by Sony Group.
In particular, support will be strengthened for Lapidus, which was established by eight Japanese companies, including Toyota Motors, investing a total of 7.3 billion yen (about 65.6 billion won). The project cost is expected to be about 2 trillion yen (about 17.9728 trillion won) in the research and development phase from 2022 to 2027, before mass production, and so far 330 billion yen (about 2.9655 trillion won) in subsidies has been invested.
The Ministry of Economy, Trade and Industry plans to cover the remaining 1.7 trillion yen (approximately 15276.8 billion won) with national funds, and wants to secure 590 billion yen (approximately 5.3019 trillion won) of this through this year’s supplementary budget. On the other hand, Asahi reported that the company’s additional investment target has not been set.
If this request to increase the semiconductor fund is realized, this year’s semiconductor-related budget will be 3.4 trillion yen, 2.6 times higher than last year’s supplementary budget plan (1.3 trillion yen).
The Japanese government is also considering a new tax reduction system for investments in strategic fields such as semiconductors.
Asahi said, “The United States and Europe are also trying to support local production of semiconductors, but the subsidy rate in the United States is only 5-15% and in Germany it is up to 50%.” He added, “Under the Ministry of Economy, Trade and Industry, the government supports projects in which companies rarely take risks. “We are going ‘all in’,” he said. “However, the projects needed in the mid- to long-term are originally supposed to be included in the main budget, not the supplementary budget. However, in a situation where high inflation has a direct impact on people’s lives, the validity of providing large amounts of support to large corporations is questionable.” .
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.