Japan’s government introduced a JPY10 trillion ($65 billion) package of subsidies and other incentives to support mass production of advanced chips used for AI applications, Reuters reported.

Prime Minister Shigeru Ishiba unveiled a draft plan, running until fiscal 2030, which will be submitted at the current parliament session, without providing detail on how it will be funded, the news agency wrote.

The draft indicated the incentives would have a total economic impact of about JPY160 trillion, Reuters stated.

In April, the government earmarked JPY590 billion to support Rapidus Corp’s aims to mass produce 2nm logic chips. Rapidus and IBM set up a joint partnership in 2022 to develop advanced semiconductors to be produced in a new fab in Japan.

Over the past three years, the government has offered some JPY4 trillion in support to the semiconductor sector.

Japan has joined the US and other countries in Europe to invest aggressively in their domestic chip sectors, driven by rising trade tension with China and supply chain disruptions.