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Subsidies aim to put chip industry ahead of the game

  • February 8, 2022
  • , The Asahi Shimbun , 4:05 p.m.
  • English Press

By Horigome Toshiki, senior staff writer

 

The Japanese government has set up a subsidy program to resuscitate the semiconductor industry, which at one time dominated the world in the development of chips, large-capacity batteries and other key components.

 

The package includes subsidies for companies that build new plants or upgrade existing facilities, as well as measures to foster the personnel needed to work in the facilities.

 

In addition, a meeting was held Feb. 7 to prepare for the establishment of a consortium in Kyushu, southern Japan, to enhance cooperation between the private and public sectors as well as institutions of higher education to accelerate next-generation semiconductor development.

 

A subsidy of around 400 billion yen ($3.5 billion), or half of the construction cost of a new semiconductor plant in Kyushu, is the key component of the package. The plant will be jointly operated by Taiwan Semiconductor Manufacturing Co. (TSMC) and a subsidiary of Sony Group Corp.

 

One condition for receiving the subsidy is that the plant operator must pledge to continue manufacturing for at least 10 years. Companies receiving the subsidy could be asked to increase production if they anticipate a semiconductor shortage due to a dearth of rare elements and ensure the technology does not leak to foreign competitors.

 

The government also plans to subsidize up to one-third of the cost of expanding existing semiconductor plants or installing new equipment.

 

A number of companies have already applied for that subsidy, according to well-placed sources.

 

To foster the personnel to design state-of-the-art chips, the government plans to set up courses in the eight national institutes of technology in the six prefectures that make up the island of Kyushu. Plans are in place to expand the program to other national institutes of technology around Japan, the sources said.

 

The TSMC plant is scheduled to begin operations in 2024. It is projected that around 1,500 specialist workers will be required, fueling fears already of a possible shortage in that department.

 

There are also concerns that the TSMC plant will not be the godsend that many local Kumamoto officials expect it to be.

 

For one thing, the chips to be manufactured at the plant will offer no technological improvement over those manufactured about a decade ago.

 

Tetsuro Higashi, a former president of leading semiconductor-production equipment maker Tokyo Electron Ltd., urged the government to strive to convince the public of the importance of reviving the semiconductor industry rather than simply stoke concerns about a possible crisis due to a shortage.

 

“The government needs to carefully explain how semiconductor technology is utilized in various sectors and how it can make the nation more prosperous by adding jobs,” said Higashi, who serves as chairman of a panel under the industry ministry working on a viable strategy for the semiconductor and digital industries. “It should also explain the need for an industry that serves as a core for basic technology to allow Japanese industry to maintain its competitiveness.”

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