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Japan Approves USD$1.3 Billion in Subsidies for Micron's Plant in Hiroshima

In a boost for Japan's semiconductor ambitions, the government has approved USD$1.3 billion in subsidies for US chip firm Micron's plant in Hiroshima.

Credits: REUTERS

The subsidies will support the installation of Dutch firm ASML's extreme ultraviolet lithography equipment, enabling the production of advanced chips.

The Japanese government's support covers nearly 40% of Micron's investment plans in Japan. The move is part of Tokyo's efforts to strengthen domestic semiconductor production and secure a supply of cutting-edge chips for future economic security.

According to Economy, Trade and Industry Minister Yasutoshi Nishimura, these advanced chips will be crucial for powering generative artificial intelligence, data centers and self-driving technology.

The approval of subsidies is a significant win for Micron, as the company faces uncertainty in China, one of its largest markets. Micron is currently under investigation by Chinese regulators, which has put half of its China sales at risk.

Tokyo has allocated a maximum of ¥167 billion to cover Micron's production costs and up to ¥25 billion for development costs. Micron plans to spend around ¥500 billion and produce what it calls "one-gamma technology" in Japan.

The Japanese government's support comes at a time when the US is also trying to boost domestic chip production. However, labor issues and delays in funding have hindered these efforts.

Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract chip maker, announced a delay in the start of production at its planned Arizona factory until 2025. In contrast, construction at a TSMC plant in southern Japan has been progressing smoothly, with the government covering nearly half of the costs.

Prime Minister Fumio Kishida's administration aims to triple domestic chip production by 2030 and restore Japan's leadership in technology. The government has earmarked billions of dollars in subsidies to achieve this goal.

Micron, which acquired former Japanese DRAM maker Elpida Memory's operations in 2013, employs over 4,000 engineers and technicians in Japan. The government hopes that supporting the chip industry will create good jobs, retain young talent and stimulate regional economies.

  • Japan approves USD$1.3 billion in subsidies for Micron's plant in Hiroshima to bolster semiconductor production.

  • The subsidies will support the installation of ASML's extreme ultraviolet lithography equipment for advanced chip production.

  • The government's support covers nearly 40% of Micron's investment plans in Japan.

Source: SCMP

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