December 6, 2021
A Cabinet decision has been made on the Bill for the Act of Partial Revision of the Act on Promotion of Developing/Supplying and Introducing Systems Making Use of Specified Advanced Information Communication Technologies and the Act on the New Energy and Industrial Technology Development Organization. The bill will be submitted to the extraordinary session of the Diet.
Purpose of the bill
While digitalization’s progress has expanded the use of high-performance semiconductors in various fields (e.g., automobiles and medical devices), there is an increasing risk of geopolitical conditions affecting their global supply chain. Securing production capacity in Japan is an urgent issue from the perspectives of strengthening industrial infrastructure and ensuring the country remains strategically essential and strategically independent.
In light of these circumstances, the Japanese government will take measures to facilitate businesses’ decisions to invest in the development and production of high-performance semiconductor production facilities etc. and contribute to securing stable production in the country. These measures include: establishing a certification program for plans concerning development and production of high-performance semiconductor production facilities etc.; providing grants to finance the execution of the certified plans; and establishing a fund for the grants etc.
Outline of the bill
(1) Partial revision of the Act on Promotion of Developing/Supplying and Introducing Systems Making Use of Specified Advanced Information Communication Technologies
(i) Establishing a certification program for plans to develop and produce production facilities for specified semiconductors*
- The government will establish a certification program concerning plans to develop production facilities for specified semiconductors etc. and to produce them at such production facilities (development and production of specified semiconductor production facilities).
- It will certify plans that meet the criteria for the development and production of specified semiconductor production facilities and implement initiatives that contribute to stable domestic production (e.g., increasing production when supply is strained) and other measures.
*Semiconductors that enable high-speed processing of large amounts of information essential for 5G information and communication systems and especially need to be stably produced within the country, due to reasons such as limited international production capacity
(ii) Providing support measures for certified businesses
- The government will provide the following support measures concerning projects carried out in accordance with the plans certified in (i):(A) Special Provisions on the Duties of Japan Finance Corporation (Two-steps Loan));
(B) Special Provisions of the Small and Medium-sized Enterprise Investment Business Corporation Act;
(C) Special Provisions of the Small and Medium-sized Enterprise Credit Insurance Act ; and
(D) Adding work to NEDO
i) Providing grants to certified businesses
ii) Providing interest subsidies to financial institutions that provide loans to certified businesses
(2) Partial revision of the Act on the New Energy and Industrial Technology Development Organization
(i) Adding work
- Providing grants to certified businesses will be added to NEDO’s work.
(ii) Establishing a fund, etc.
- The government will establish a fund to finance grants for the development and production of specified semiconductor production facilities carried out in accordance with certified plans. If a notification is given to the effect that a certification has been changed or cancelled, the Minister of Economy, Trade and Industry shall, when it is found necessary, order NEDO to refund all or part of the subsidies granted to the National Treasury.
Enforcement date for the bill
The Act will come into effect on the day specified by Cabinet Order within the period up to March 31, 2022.