Japan’s Finance Ministry: Japan’s Spending on Chip Industry Excessive; Economy Ministry Says Spending on Par With U.S., Europe, China

The Yomiuri Shimbun

20:00 JST, June 1, 2024

The Economy, Trade and Industry Ministry said Friday that the amount of financing Japan has given to the semiconductor industry is on par with the United States, Europe and China in relation to each country’s gross domestic product, refuting the Finance Ministry’s claim that the amount is excessive.

Currently, many governments are trying to secure chipmakers by offering large investments.

At a meeting of a panel of experts to discuss how to vitalize the chip industry, the economy ministry presented data showing the percentage of financial assistance given by each country in relation to their GDPs.

Japan has provided more than ¥3.9 trillion, which accounts for 0.68% of the country’s GDP. China’s spending accounts for 0.79% of its GDP, Germany’s accounts for 0.71% and the United States’ accounts for 0.50%.

At an April meeting, the Finance Ministry pointed out that Japan has given 0.71% of its GDP, much more than the 0.21% provided by the United States and the 0.41% provided by Germany.

The difference in percentages resulted from what the two ministries included in their calculations. The Finance Ministry focused on such expenses as plant construction, while the economy ministry also included preferential taxation treatments into its calculations.

Regarding the GDP, the Finance Ministry also used the nominal figure, while the economy ministry used the real figure, which excludes changes in price fluctuations.

Very few have objected to providing financial aid to the semiconductor industry, as the funding is expected to attract capital from the private sector.

The Finance Ministry insists that it is essential for the government to select which industries and companies are eligible for government aid and focus its financial resources toward them.

At the economy ministry’s meeting with experts, panel members also confirmed that they will consider a system to help the Japanese chipmaker Rapidus Corp. procure funds, as the company aims to domestically manufacture the most advanced semiconductor chips.

Details are still being considered, but the panel presented an option in which the government can guarantee loans to Rapidus.