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(Bloomberg) — Liberal Democratic Party heavyweight Akira Amari’s defeat in Japan’s general election removes from parliament one of the chip sector’s biggest advocates as concerns grow over the amount of taxpayer money getting plowed into the industry.
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Amari, who previously served as economy minister during his four decades as a lawmaker, had championed funneling large sums of public money into building up the country’s semiconductor capacity. He lost his seat in Kanagawa Prefecture’s 20th district to Sayuri Otsuka of the Constitutional Democratic Party of Japan, who campaigned on a platform for more childcare and nursing care support.
Along with Yoshihiro Seki, secretary general of the LDP’s lawmaker coalition on chips, the 75-year-old Amari was a key architect behind a years-long push that allocated roughly ¥4 trillion ($26 billion) in subsidies to chip factories. That includes a pledge of as much as ¥920 billion to startup Rapidus Corp., which is now seeking to raise more capital in its quest to mass produce advanced chips by 2027. Seki held on to his seat.
NHK on Tuesday reported that the Economy Ministry is considering a new framework for supporting the chip sector over several years, if it’s able to secure funds. It was not clear from the report whether the new framework would ramp up or slim down the provision of public money.
The report said the government was looking for ways to encourage investment in semiconductors from the private sector and aimed to bring together its plans in an upcoming economic package.
Prime Minister Shigeru Ishiba has pledged a stimulus package bigger than last year’s. It remains to be seen if the next extra budget will include substantial subsidies for the chip supply chain.
In the election the LDP failed to win a majority even with its coalition partner Komeito for the first time since 2009, likely meaning it must compromise with opposition parties on policy.
–With assistance from Isabel Reynolds.
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