The Japanese Government has expressed its willingness to subsidise the construction of domestic chip factories and is determined to spend significant funds from this year’s supplementary budget to establish a fund at NEDO, a state-owned body focused on energy and industrial technology research and development.

As the Nikkei reports, a planned new plant of Taiwan’s TSMC is likely to be the first recipient, with other companies eligible for the subsidies if they ramp up chip production when supply is critical.

The government wants to subsidize up to half of TSMC’s estimated one trillion yen ($8.82 billion) investment in building a chip factory in Kumamoto, southern Japan.

The plant in Kumamoto, southern Japan, is focused on manufacturing semiconductors for cars, camera sensors and other products adversely affected by the global chip shortage and is expected to open in 2024.

Prime Minister Fumio Kishida has pledged to prioritize economic security in his government, such as increasing domestic semiconductor production.