Japanese Prime Minister Shigeru Ishiba announced on Monday a $65 billion initiative aimed at bolstering Japan's semiconductor and artificial intelligence industries through subsidies and financial incentives. The plan, which allocates more than 10 trillion yen ($65 billion) in support by fiscal 2030, aligns with global efforts to secure semiconductor supply chains amidst trade tensions and other disruptions.

According to a draft obtained by Reuters, the Japanese government will submit the plan, which includes legislative proposals for next-generation chip production, to the upcoming parliamentary session. Key beneficiaries include chip foundry venture Rapidus and AI chip suppliers, with an anticipated economic impact of roughly 160 trillion yen.

Led by industry experts, Rapidus aims to begin mass production of advanced chips in Hokkaido by 2027, collaborating with IBM and Belgium's research institution Imec. At Monday's news conference, Ishiba noted that no deficit-covering bonds would be issued to fund the plan, though he did not disclose specific financing details.

Last year, Japan allocated around 2 trillion yen to support its chip sector. This latest initiative, part of a broader economic package set for cabinet approval on Nov. 22, proposes 50 trillion yen in combined public and private investment over the next decade.

In addition, Ishiba announced plans to consult with business and labor union leaders later this month on wage negotiations for the coming year. With rising living costs, the government prioritizes sustained wage growth to support household consumption and economic stability.