The Japanese government is stepping up support for the domestic semiconductor industry.
It's part of efforts to secure more chips amid a global shortage, and drive technological advances to new levels.
The Industry Ministry announced the plans on Monday.
Officials say domestically procuring enough chips is key to the country's economic security.
As a first step, they will likely assist Taiwanese industry leader TSMC with its plan to set up a factory in Japan.
The government will also help cover some of the costs of renovating existing plants in the country.
In the next phase, Japan will strengthen its cooperation with the United States to establish the next-generation technology required for significantly greater chip performance.
Semiconductor makers have been packing more transistors into chips to handle ever-increasing data flows.
TSMC and South Korea's Samsung Electronics have been among the technological leaders. They plan to soon start producing chips with circuit lines 3 nanometers in width.
Further miniaturization is considered unlikely to reduce that to under 2 nanometers. Instead, the Industry Ministry plans to explore ways to overlay circuits on top of each other. It aims to help commercialize leading-edge, energy-efficient chips by the latter half of the 2020s.
Demand for chips is expected to keep growing in response to efforts to digitalize and decarbonize.