Japan's Cabinet approved amendments to the Act on the Promotion of Information Processing and the Act on Special Accounts on February 7, 2025. The proposal, which will undergo a National Diet review, aims to support next-generation semiconductor and data center firms through enhanced government investment and tax incentives, with Rapidus positioned as a primary beneficiary.
According to NHK and Nikkei Asia, Japan plans to invest JPY10 trillion (US$66.04 billion) in semiconductors and AI over the next seven years, with JPY4 trillion allocated for next-generation chip production, including Rapidus's operations.
The proposed amendment establishes a framework for government investment in semiconductor firms through the Information-technology Promotion Agency (IPA) and introduces debt guarantees for private-sector loans, specifically targeting Rapidus. Additionally, the legislation provides tax incentives on corporate enterprise and registration taxes, with the government aiming to pass the amendment within the current parliamentary session.
The selection of semiconductor funding recipients will follow a public selection process, with final decisions expected by the summer or fall of 2025. The Ministry of Economy, Trade and Industry (METI) will establish the criteria, which are anticipated to favor Rapidus.
For the upcoming fiscal year, the 2025 budget includes JPY100 billion for Rapidus, to be distributed in the second half of 2025. This investment will establish the Japanese government as a significant shareholder in the semiconductor firm. In parallel, Japanese private firms are expected to match this investment with an additional JPY100 billion, strengthening Rapidus's semiconductor production capabilities.
The amendment also allocates remaining METI funds to semiconductor support and authorizes new "Advanced Semiconductor/AI Technology Bonds" to finance the initiative.
During a press conference, Minister of Economy, Trade and Industry Yōji Mutō emphasized that Japan must choose between continued reliance on chip imports or strengthening domestic production. He committed to fostering robust Diet discussions to secure public and legislative backing for the government's semiconductor policies.