TAIPEI (Taiwan News) — Japanese investment in the US may help finance Taiwanese semiconductor plants as part of a sweeping investment deal negotiated between Tokyo and Washington this week.

Speaking to the press on Saturday, Japan’s Economic Revitalization Minister Ryosei Akazawa said a US$550 billion (NT$1.6 trillion) investment package may include funding for Taiwanese semiconductor firms, per Reuters. The investment would partly come in exchange for lower tariffs on Japanese products entering the US market.

When citing potential projects eligible for investment, Akazawa said the funds could be used for companies that are neither Japanese nor American. “For example, if a Taiwanese chipmaker builds a plant in the US and uses Japanese components or tailors its products to meet Japanese needs, that's fine too,” he told Reuters.

Details of the arrangement remain unclear, but reports speculate Taiwan Semiconductor Manufacturing Co. could be a likely recipient. Akazawa told NHK that Japan and the US are focused on building resilient supply chains to protect critical technologies and maintain economic security.

Akazawa, who met with former President Donald Trump last week, said the proposed deal could reduce the recently announced 25% tariff rate on Japanese goods by as much as 10%, according to NHK. He said the investments are expected to be made within the next three years, and that if the deal is successfully implemented, Japan could avoid an estimated US$68 billion in losses.