Japan’s $550B investment could back Taiwan chip plants in US, says trade official

Japan's chief trade negotiator, Ryosei Akazawa, stated on Saturday that the $550 billion investment package recently announced in Japan under a tariff deal with the United States could be utilised to help finance semiconductor plants in the US built by Taiwanese companies.

The statement could thus be taken as indicating that Japan is striving toward a goal, willing to spend aggressively to maintain its place in the global chip supply chain, even if it involves subsidizing out-of-country (in this case, non-Japan) enterprises.

This week's agreement on the package is part of a larger deal under which Japan is granted reduced tariffs on its exports to the US.

In exchange, Japan will pour $550 billion in investments in the direction of the US, but the specific details of the initiative are still mostly undefined.

"Japan, the United States, and like-minded countries are working together to build supply chains in sectors critical to economic security," Akazawa told NHK.

Taiwan chipmakers eligible for support

Akazawa highlighted that the financing will not be limited to projects by US or Japanese companies.

He cited an example of a Taiwanese chipmaker operating in the United States that uses Japanese components or tailors its production to meet Japanese market demands. "That's fine, too," he responded, without naming a specific company.

The comment appears to be about Taiwan Semiconductor Manufacturing Co. (TSMC), a leading participant in advanced chip manufacturing.

The United States relies heavily on TSMC, which raises concerns about supply chain stability given Taiwan's proximity to China.

TSMC has already announced a significant expansion in the United States, including a $100 billion promise made at the White House in March to bolster the $65 billion previously pledged for three new factories in Arizona.

One of these facilities is currently active.

New legal framework enables foreign financing

The investments will be channelled by two state-backed institutions, namely the Japan Bank for International Cooperation (JBIC) as well as Nippon Export and Investment Insurance (NEXI). A revision to domestic law recently enabled JBIC to fund foreign firms considered vital to Japan's supply chains.

Akazawa said that just 1 to 2 per cent of the package will go towards equity investment. Most of the $550 billion will be allocated in the form of loans and guarantees.

Profit share is viewed as secondary to tariff relief

When queried about a White House statement claiming that the US would keep 90% of the earnings from the investment package, Akazawa explained that this only refers to returns from the limited equity part.

While Japan initially tried to collect 50% of the returns, Akazawa argued that the sacrifice was a minor price to pay for the larger economic benefits.

He pointed out that the agreement will save Japan around 10 trillion yen (approximately $67.72 billion) in tariff charges, which will more than balance the loss of investment return share.

He stated that Japan intends to implement the entire $550 billion investment package during the current term of US President Donald Trump.

At 147.66 yen to the dollar, the funding's size and speed highlight Japan's strategic focus on long-term supply chain resilience—particularly in the semiconductor industry, where geopolitical tensions continue to reshape global priorities.