According to trade minister Koichi Hagiuda, Japan’s economic stimulus package would include a plan to develop the semiconductor sector urgently, as well as a strategy for storage batteries.

Hagiuda presented the concept just days before Prime Minister Fumio Kishida is expected to launch a stimulus package totaling tens of trillions of yen to help Japan recover from the COVID-19 outbreak.

The idea comes after Taiwan Semiconductor Manufacturing Co (TSMC) announced last week that it would build a $7 billion chip plant in Japan alongside Sony Group 6758.T, a move that the Japanese government applauded.

Japan’s chip-making industry, which was once the world’s No. 1 in the 1980s, has battled to keep its competitive edge, declining steadily over the last three decades while regional rivals such as Taiwanese manufacturers gain ground.

“A major cause of the lost three decades was the lack of digital investment,” Hagiuda told a panel meeting at the ministry.

“Many of the problems Japan faces could be resolved by making use of digital technology … The key to post-corona growth is to revitalise broader digital investment nationwide.”

The government, according to Hagiuda, is considering methods to support the construction of large-scale production sites for storage batteries, which he believes would be critical to meeting green and digital goals.

Japan wants TSMC, the world’s largest contract chipmaker, to develop operations in Japan to sell chips to electronic device makers and cars, as trade tensions between the US and China threaten supply chains and demand for the critical component grows.