The Japanese government plans to offer subsidies to chip manufacturers in the country to secure a stable supply of semiconductors.
NHK has learned about the new economic security scheme under which the government is set to establish a fund to help semiconductor firms build up their production capacity.
The global chip shortage comes at a time when countries are recovering from the economic fallout from the coronavirus pandemic. The chip crunch has forced Japanese automakers to scale back output.
The government plans to pay manufacturers through the new fund half of the cost to construct chip factories on condition that they will produce and invest constantly.
The manufacturers will also be required to increase their output in the wake of a semiconductor shortage and ensure a stable supply of their products.
The industry minister will approve plans submitted by businesses after consulting with relevant government agencies. If manufacturers don't comply with the requirements, they will have to pay back the subsidies.
Last month, the world's largest contract chipmaker, TSMC, announced plans to build a new factory in Japan.
The Japanese government plans to provide financial support for TSMC through the new fund.