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Japan allocates $5.2bn to fund chip plants by TSMC and others

  • November 23, 2021
  • , Nikkei Asia , 8:20 p.m.
  • English Press

TOKYO — Japan is allocating about 600 billion yen ($5.2 billion) of its fiscal 2021 supplementary budget to support advanced semiconductor manufacturers, Nikkei has learned.


The government plans to invest about 400 billion yen in a new factory set up by the world’s largest contract chipmaker Taiwan Semiconductor Manufacturing Co. in Kumamoto prefecture, southwest Japan. The remaining 200 billion yen will go toward setting up other new factories, with projects under consideration including by U.S. memory chipmaker Micron Technology and Japan’s Kioxia Holdings.


The Japanese government is considering making semiconductors a new area of focus under a law targeting companies developing high-speed 5G technologies, meaning it would approve investment plans for their factories under the revised law.


Micron has taken over Elpida Memory’s site in Hiroshima prefecture, in the west of Japan, where it produces advanced dynamic random access memory (DRAM) chips. The company has been in talks with the governments of various countries including Japan regarding investments in production.


Kioxia has an advanced NAND flash memory factory in Japan. A new factory building is under construction in Yokkaichi city, Mie prefecture, which would start operations as early as 2022. The company also plans to start construction of a new factory building next year in Kitakami city, Iwate prefecture, to start operations as early as 2023.


The 600 billion yen fund would cover subsidies over several years. Companies would receive support under the condition that they would increase production when there is supply shortage, as the Japanese government hopes to ensure a stable domestic chip supply.


Japanese Prime Minister Fumio Kishida recently told Nikkei, “while TSMC is a hot topic, I think it is important to take measures to expand various possibilities in the private sector, such as attracting the U.S. semiconductor manufacturers.”


Amid accelerating digitization and an increase in data center investments, demand for memory chips is expected to grow in the mid- to long-term. Japan’s industry ministry has stated in its semiconductor reinforcement package that “securing a stable supply of advanced semiconductors (logic, memory) is the most important security issue.”

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