Japan to give Micron Technology up to $320 million to boost chip output in Hiroshima By Reuters

© Reuters. FILE PHOTO: Micron GDDR6X graphics memory solution is pictured in this April 12, 2022 handout image. Micron Technology/Handout via REUTERS

TOKYO (Reuters) -Japan will give U.S. chipmaker Micron Technology (NASDAQ:) a subsidy of up to 46.5 billion yen ($320 million) so it can build advanced memory chips at its plant in Hiroshima, the trade and industry ministry said on Friday.

The financial aid announcement, which follows the visit to Japan by U.S. Vice President Kamala Harris, is the latest example of growing cooperation between Washington and Tokyo in chip manufacturing amid growing tension and an intensifying technology rivalry with China.

Japan in July said it was giving 92.9 billion yen to U.S. firm Western Digital Corp (NASDAQ:) to boost flash memory chip output at a Japanese plant operated with local partner Kioxia Holdings, which was spun off from Toshiba (OTC:) Corp.

That announcement 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.

Japan’s decision to subsidise Micron’s production plans comes after the chipmaker on Thursday said it was cutting its investment plans by 30% amid a fall in demand for PCs and smartphones.

Japan is also providing funds for Taiwan Semiconductor Manufacturing Co to build a chip plant in Japan along with Sony Corp (TYO:) 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 have 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.

Taiwan’s proximity to mainland China, chip shortages caused by COVID-19 disruptions and growing global demand for the key component has spurred concern in Japan about shortages that could undermine national security.

($1 = 144.7000 yen)

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By Reuters