The board of semiconductor materials manufacturer JSR Corp. will meet on Monday to talk about a potential multi-billion-dollar acquisition by a government-backed fund, which would speed up Japan’s ambitions to bolster its chip industry.

The investments made in Japan by chipmakers and the steps the government is taking to resurrect the country’s semiconductor industry are listed below.

Which firms are making investments?

The construction of a $7 billion semiconductor factory on Kyushu Island was announced by Taiwan Semiconductor Manufacturing Co. (TSMC) in November. Starting in 2024, the facility will produce 12 and 16-nanometer chips.

Investors in TSMC include the Sony Group and Denso, a manufacturer of auto parts that will employ its processors.

Micron Technology, a US memory chip manufacturer, announced in May that it intended to work with the Japanese government to invest up to 500 billion yen ($3.5 billion) over the coming years in extreme ultraviolet (EUV) technology. It asserted that it would introduce EUV technology for chip fabrication to Japan first.

In close proximity to its current research and development facility in Yokohama, Samsung Electronics is considering establishing its first chip packaging test line in Japan, sources told Reuters in March.

A manufacturing cluster in Chitose, located on the northern island of Hokkaido, is where Japan’s state-backed Rapidus announced in February that it would construct a chip facility.

In order to create cutting-edge 2-nanometer chips, Rapidus has partnered with IBM. The company hopes to open a prototype line by 2025.

Subsidies and growth strategies

Japan wants to triple domestic chip sales to 15 trillion yen by 2030 by promoting investment and providing various forms of support. The country has seen its share of the global semiconductor business decline from 50% in the late 1980s to roughly 10%.

It has provided TSMC with a 476 billion yen subsidy, or roughly half the factory’s anticipated cost.

Government support for Rapidus totaled 70 billion yen at first, and local media reported in April that a further 300 billion yen in funding was close to being finalized.

According to a source cited by Reuters in May, Japan is also putting up subsidies for Samsung’s potential semiconductor facilities that might total roughly 15 billion yen.

Control of exports

Japan announced in March that it would limit the sale of 23 different types of chipmaking equipment, aligning its technology trade rules with a US effort to stop China from producing sophisticated semiconductors.

Major chip equipment producers Nikon and Tokyo Electron are based in Japan, which did not specifically mention China as the target of the restrictions, instead stating that manufacturers would need to request export authorization for every region.

Government-backed fund

JSR said the company is in discussions with the government-backed Japan Investment Corp. (JIC), which is controlled by the influential trade ministry, about a takeover.

In order to increase Japan’s competitiveness, the fund was established in 2018 and is backed by $20 billion in government funds.

It replaced the Innovation Network Corp. of Japan (INCJ), which had served in the position since 2009 as a temporary program to support the growth of new sectors and corporate mergers.

INCJ concentrated mostly on struggling or failing businesses. Renesas, a manufacturer of semiconductors, and Japan Display, a manufacturer of flat screens, are two companies it has previously invested in.

JIC has mostly invested in startups and venture capital funds up until now.

Along with private equity company Japan Industrial Partners, it also took part in the effort to take Toshiba private but eventually withdrew from the process over differences in post-buyout policies.