(Bloomberg) — Japan’s ruling party named Daishiro Yamagiwa as the new chairman of its group that promotes semiconductors, as it sets up a new mechanism to boost funding for the key industry.
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Yamagiwa, who formerly served as economic revitalization minister, replaces Akira Amari, a Liberal Democratic Party heavyweight who championed Tokyo’s renewed push for chips until he lost his seat in parliament in last month’s national election.
The appointment comes after Prime Minister Shigeru Ishiba pledged more than ¥10 trillion ($65 billion) of fresh public support for Japan’s semiconductor and artificial intelligence sectors. Those outlays are in addition to the roughly ¥4 trillion Japan has secured for the industries in the last three extra budgets, including ¥920 billion for Rapidus Corp. in Hokkaido, according to the industry ministry. Rapidus aims to mass produce advanced logic chips by 2027.
“Semiconductors can be a choke point for future industries, and we shouldn’t be wondering whether Rapidus will be able to win or not,” Yoshihiro Seki, secretary general of the LDP group, said to reporters on Tuesday. “We have to make it succeed and win no matter what.”
The LDP group is likely to press ahead with legislation needed to enable the new funding mechanism in a regular parliamentary session next year. The LDP and its coalition partner Komeito lost their majority in last month’s election and they now need support from opposition parties to implement their policy measures.
Yamagiwa resigned from his ministerial post in 2022 due to alleged ties to the Unification Church, a group whose influence in Japan came under fire following the assassination of former Prime Minister Shinzo Abe. Yamagiwa’s website says he has severed those ties.
In addition to the legislative hurdle, Ishiba’s chips pledge is set to rely on a complex mix of funding measures, according to the draft of an economic stimulus package seen by Bloomberg. The government is expected to announce the package later this week.
A breakdown of the funding methods in the draft:
¥2.2 trillion through transfers from the fiscal investment and loan special account to the energy special account; will also issue special bonds linked to the energy account as needed
¥1.6 trillion by utilizing money returned to the national treasury, using leftovers in existing funds for chip support, and selling government-owned shares in Shoko Chukin Bank
¥2.2 trillion by using green transformation bonds and tapping money returned to the national treasury through reviewing existing industry ministry funds
At least ¥4 trillion worth of financial support through investment and guaranteeing private sector loans
