Air Liquide to Invest $236 Million in Japan to Support AI Chip Production

The investment is part of Japan’s strategy to revive its once global semiconductor industry.

Semiconductor chips on a circuit board of a computer in this illustration picture taken on Feb. 25, 2022. Florence Lo/Illustration/Reuters

Air Liquide announced plans April 16 to invest 200 million euros ($236 million) to provide industrial gases in Hiroshima, Japan, to support the country’s goal of reviving its semiconductor industry in the global race to develop artificial intelligence (AI).

The French company will build, own, and operate two new industrial gas production units to produce gases needed to make cutting-edge chips that are central to AI technologies, according to Air Liquide.

The operations are expected to start by the end of 2028 and deliver ultra-pure nitrogen, oxygen, and argon to ensure cleanliness and reliability throughout the semiconductor manufacturing process, and meet the industry’s highly stringent standards.

“This new facility highlights Air Liquide’s ability to keep pace with our semiconductor customers’ rapid expansion and new investments to develop the next-generation chips which fuel technologies like AI,” said Ronnie Chalmers, Air Liquide Group’s vice president, in a statement. “Japan has been a powerhouse in the semiconductor industry since the 1980s and remains a global technology leader today.”

Air Liquide, the second-largest global supplier of industrial gases, operates in 59 countries and already runs 78 facilities in Japan dedicated to electronics activities, including an innovation campus in Tokyo that opened in 2019.

Japanese Minister of Economy, Trade, and Industry Ryosho Akazawa also announced April 11 that the government had approved $4 billion in additional subsidies for Japanese semiconductor manufacturer Rapidus to enter the AI chipmaking arena. The announcement was made during the opening of Rapidus’s semiconductor analysis facility in Chitose City, Hokkaido, according to the Japan Times.

The funds are intended to help pay for the company’s work for Fujitsu, Japan IBM, Pentaocean, and others. In all, Japan will have spent $16.3 billion into Rapidus, a government-backed and directed firm, by the end of March 2027.

The investments are part of Japan’s race to compete in the global AI race by restoring the country’s semiconductor production to 1980s levels.

The country was once a global leader in chip manufacturing, but has fallen about a decade behind technology leaders in Korea, Taiwan, and the United States, according to a 2024 report by ASEAN+3 Macroeconomic Research Office (AMRO).

In the late 1980s, Japan had captured more than half of the global semiconductor market, overtaking the United States.

U.S. President Ronald Reagan imposed a 100 percent tariff on a variety of Japanese electronic goods, including semiconductors, in 1987 after Japan failed to stick to a 1986 trade agreement regarding prices and market access that required the country to open its market to foreign producers.

Japan’s share of global semiconductor sales is less than 10 percent, but plans are underway to revive the industry. Japan’s strategy includes strengthening domestic production capacity, forming alliances with the United States on next-generation technology, and developing game-changing future technology, according to the report.