Japan’s Chip, Battery and Other Supply Chains Receive $1 Billion Investment from National Bank

The Japan Development Bank (DBJ), supported by the Japanese government, will invest over 150 billion yen (1 billion US dollars) to enhance the supply chain resilience of semiconductors, batteries, and other industries crucial to national economic security.
These investments will be divided into two years starting from fiscal year 2024, and will take the form of capital injection and subordinated debt.
Under the financing framework utilizing government investment, the bank will provide up to tens of billions of yen in funding for capital expenditures and research and development related to key commodities such as next-generation semiconductors, batteries, and rare earth metals; The funds will also be invested in infrastructure such as logistics facilities to support the supply chain.

It is expected that the Japan Development Bank will soon decide to invest up to 15 billion yen to increase the production of automotive lithium-ion battery materials by Japan Arts (formerly Toyo Ink SC Holdings).
This fund will be used for Art’s 49 billion yen capital expenditures in Japan and overseas. The Japan Development Bank will not receive repayment, but will continue to gain a share of the company’s revenue from battery materials business.
The bank’s goal is to provide support for private sector venture capital investments in industries crucial to economic security, which require significant capital expenditures and research and development funds. Relying solely on borrowing to meet these needs will result in a heavy repayment burden and may put one at a disadvantage in international competition.
The United States and the United Kingdom are making greater use of this hybrid finance that combines public and private funds to meet the capital needs of major industrial transformations, such as getting rid of fossil fuels.
The Japan Development Bank also plans to invest over 100 billion yen in innovation within two years from fiscal year 2024, mainly in startups, and over 150 billion yen in renewable energy and other areas that help reduce carbon emissions.
These measures will accelerate the financing pace of the Japan Development Bank. Since the establishment of the government investment framework in the fiscal year 2015, the Development Bank of Japan has provided an average of slightly over 100 billion yen of such funds annually.