Insight: Subsidizing semiconductor plants, launching 100 autonomous vehicle projects on public roads and encouraging citizens to contribute more to their pensions – Japan's annual economic and fiscal policy plan is a grab bag of measures meant to stimulate key sectors of the economy. The 2024 version, according to a Nikkei newspaper scoop this week, will focus on microchips and attempts to set a legal basis for ongoing fiscal support for this most strategic industry.
Impact: Back in the 1980s, Japan dominated the world chip market. These days its share is in single digits. Reviving large-scale manufacturing of leading-edge semiconductors is therefore a government priority, designed to boost economic growth, provide high-value jobs and ensure economic security for key industries. Hence the idea of actually legislating a program of ongoing subsidies. The biggest beneficiary is Rapidus, the domestic champion, which is getting state loans to build a cutting-edge 2-nanometer chip fab in northern Hokkaido. But global players like TSMC, which is investing in southern Kyushu, will gain too.