Japan intends to devote 220 billion yen ($2.03 billion) to encourage private-sector research and development of technology that will succeed fifth-generation wireless communications.

Prime Minister Shinzo Abe's government plans to create the fund as part of an economic stimulus package, Nikkei has learned. The stimulus proposal will be finalized early next month.

Japan is due to launch 5G service commercially next year, but domestic companies trail Chinese and South Korean peers in that field.

Some Japanese companies already have begun development of so-called 6G technology, which is expected to produce data transfer speeds 1,000 times faster than current networks. To support the research, Tokyo will create the fund under the state-backed New Energy and Industrial Technology Development Organization.

The fund will collaborate with industries such as chipmaking, telecommunications, automotive and industrial machinery on R&D for state-of-the-art semiconductors and technology for associated systems. The effort will last three to five years, beginning in April with the new fiscal year.