Japan to provide Micron Tech up to S$458 million to boost chip output

Japan to provide Micron Tech up to S$458 million to boost chip output

At its Hiroshima plant.

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Japan will give Micron Technology Inc a subsidy of up to 46.5 billion yen (S$458 million), the industry ministry said on Friday, so it can make advanced memory chips at its Hiroshima plant, even as the US chipmaker trims capital investment elsewhere.

The announcement, which follows a visit to Japan by US Vice President, Kamala Harris, is the latest example of growing cooperation between Tokyo and Washington in chip manufacturing amid increasing tension and technological rivalry with China.

"Micron appreciates the support of the Japanese government and is proud to be a global partner in Japan's effort to expand semiconductor production and advance innovation," Micron's executive vice president of global operations, Manish Bhatia, said in a press release.

Micron said it will build its new 1-Beta dynamic random-access memory (DRAM) chips at the Hiroshima plant.

The US chipmaker on Thursday cut overall investment plans by 30 percent amid a fall in demand for personal computers and smartphones.

"The milestone announcement today by METI (Ministry of Economy Trade and Industry) and Micron symbolises the investment and integration of our two economies and supply chains," US Ambassador to Japan, Rahm Emanuel, said in a statement. "And that will only accelerate from here forward."

The latest component of Japan's plan to bolster domestic chip production comes after it gave 92.9 billion yen to US firm Western Digital Corp in July to boost flash memory chip output at a Japanese plant operated with local partner Kioxia Holdings, which was spun off from Toshiba Corp.

Kioxia on Friday said it would trim production at two plants in Japan by 30 percent from October to bring "production in line with current market conditions".

The announcement about Western Digital's subsidy came ahead of a trip to the United States by then-industry minister Koichi Hagiuda for talks on semiconductor cooperation that led to an agreement to establish a joint research centre for next-generation chips.

In Japan this week, Harris talked to heads of semiconductor-related businesses about incentives available to manufacturers within the United States following the passage of legislation that provides US$52 billion (S$74 billion) in subsidies.

Japan is also providing money to Taiwan Semiconductor Manufacturing Co Ltd (TSMC) to build a chip plant in Japan along with Sony Corp and auto parts maker Denso Corp.

Once the world's biggest centre of semiconductor production, Japan has seen its share of global output shrink as chipmakers expanded capacity elsewhere, particularly in Taiwan, which makes most of the world's advanced semiconductors under 10 nanometres that are used in smartphones and other products.

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