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Japan will legislate to subsidize semiconductor manufacturing, TSMC is the first beneficiary

According to the Nikkei Asian Review, the Japanese government will establish a legal framework to subsidize new local factories for advanced semiconductors, starting with TSMC’s planned facility in Kumamoto Prefecture.

It is reported that TSMC may become the first beneficiary of the legal update. On October 24 this year, TSMC officially announced that it will build a 28nm fab in Japan with a monthly capacity of 40,000 wafers. According to sources, construction of the factory will begin in 2022 and mass production will begin in 2024.

According to reports, the Japanese government hopes to undertake half of TSMC’s 1 trillion yen (about 56.3 billion yuan) investment in building a fab. If the news is true, this legal update may become the legal basis for Japan’s subsidies to TSMC, and other chip manufacturers will be able to obtain this subsidy in the future.

Countries around the world are increasingly viewing chips as a national security issue as global shortages disrupt production in the auto industry and beyond. To support domestic supply, the Japanese government plans to submit legislative changes to parliament as early as December with clear rules to subsidize the construction of new facilities.

The government wants to update the laws that currently apply to companies developing 5G wireless technology to designate semiconductors as a new priority area. It will secure the equivalent of billions of dollars in the supplementary budget for fiscal year 2021 to set up a subsidy fund under the New Energy and Industrial Technology Development Organization.

Once a qualified factory is in operation, it may need to maintain stable production, investment and technological development. In the future, these manufacturers may also be required to increase production during periods of shortage and be required to comply with laws to prevent technology leaks.

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