On April 16, Japan prime minister Shinzo Abe expanded the state of emergency beyond Tokyo, Osaka and five other prefectures to all 47 prefectures nationwide in an effort to curb the spread of COVID-19.
As I reported two weeks ago, SEMI Japan initiated communications with all prefectural governments on April 10. Since then, the government’s concerns over the virus’s impact on the semiconductor supply chain have heightened.
Prefectural Governments Plan No Restrictions on the Semiconductor Supply Chain
Of the 47 prefectural governors I contacted, urging them to classify the semiconductor industry as an essential business, 40 confirmed in follow-up calls through April 20 that they have no plans to restrict operations of the semiconductor industry and supply chain companies in their jurisdictions. Those prefectures include Aichi, Akita, Aomori, Chiba, Ehime, Fukui, Fukuoka, Fukushima, Gifu, Gunma, Hiroshima, Hyogo, Ishikawa, Iwate, Kagawa, Kagoshima, Kanagawa, Kochi, Kumamoto, Kyoto, Miyagi, Miyazaki, Nagano, Nagasaki, Nara, Niigata, Oita, Okayama, Okinawa, Saga, Saitama, Shiga, Shimane, Shizuoka, Tochigi, Tokushima, Toyama, Wakayama, Yamagata and Yamanashi.
However, the Aichi, Iwate, Kumamoto, Nagasaki, Oita and Saga governors cautioned they will reconsider restrictions on the semiconductor and other industries if COVID-19 transmissions worsen.
The seven other prefectures including Tokyo and Osaka are not planning to respond to our request until they have COVID-19 transmission mitigation plans in place. In the meantime, SEMI Japan will continue to encourage prefectural governments to allow semiconductor supply chain companies to continue to operate unrestricted, a move consistent with current national policy for novel coronavirus disease control.
Japan’s Economic Stimulus Package
On April 6, a day before prime minister Shinzo Abe declared the emergency state for seven prefectures, he announced an unprecedented 108 trillion yen ($989 billion) stimulus package[1]. The package, equivalent to about 20% of the Japan’s economic output, dwarfs the 56 trillion yen in aid passed in the wake of the 2008 financial crisis.
The first phase of the relief package seeks to halt job losses and bankruptcies, while the second will support a V-shaped economic recovery. For businesses, phase-one aid includes:
- Subsidies for firms that keep workers on the payroll. Large companies keeping at least half of their workers on the payroll and small and medium sized businesses that continue to pay at least two-thirds of their employees are eligible for the payouts.
- One-year deferment of income and regional tax payments for companies hit by the virus
- Property tax reductions of 50% in fiscal year 2020 for small and medium sized companies with sales that have fallen by at least 30%, and property tax exemptions for those with sales suffering contractions of at least 50%.
- Interest-free loans requiring no collateral for small and medium sized companies
- Low-interest loans available to medium sized and large companies through the Development Bank of Japan and Shoko Chukin Bank
The second phase of the package, still under development, could include incentives to recharge consumer spending and tourism and subsidies for regional economies once the coronavirus has been contained.
Japan COVID-19 Stimulus and Support Resources
The economic support measures planned by the Japan Ministry of Economy, Trade and Industry (METI) are summarized at https://www.meti.go.jp/english/covid-19/index.html#10.
Prefectural and municipal stimulus and support information is summarized in Japanese at https://j-net21.smrj.go.jp/support/tsdlje00000085bc.html.
SEMI Supports Members with COVID-19 Resources
SEMI international headquarters and regional offices are here to help you, our members. For more information on our webinars, surveys, best practices and other information designed to help you meet the challenges of the pandemic, please visit the SEMI Coronavirus Updates & Resources page.
[1] The government increased the stimulus package to ¥117.1 trillion after a sudden policy shift to provide cash handouts of ¥100,000 for every individual in Japan. Originally, the plans were to give ¥300,000 to each household that has seen a sharp fall in income due to the virus outbreak.