Japan to pay up to $320 million for US company's chip production

TOKYO (AP) — Japan will give a major U.S. chipmaker a subsidy of up to 46.6 billion yen ($322 million) to support its plan to produce advanced memory chips at a Hiroshima factory, the Friday the Japanese trade minister.

The announcement to subsidize Micron Technology comes on the heels of US Vice President Kamala Harris’ visit to Japan, as the two countries intensify cooperation to expand manufacturing and supply chains for critical materials.

“I hope that the agreement will contribute to the further expansion of cooperation between Japan and the United States in the field of semiconductors,” Japan’s Economy and Trade Minister Yasutoshi Nishimura said.

He said the government approved the deal on Friday under a law related to economic security.

Japan has set up its own fund to support semiconductor production, and Friday’s deal is its third deal.

During his trip to Asia this week, Harris met with Japanese officials and executives of semiconductor companies to seek further cooperation to strengthen semiconductor development and production amid China’s growing influence.

Micron was among the companies that participated in the meeting with Harris, along with Tokyo Electron, Nikon, Hitachi High-Tech Group, Fujitsu Ltd.

Micron said in a statement that it will use the grant to strengthen production capacity and accelerate development of the company’s DRAM 1-beta, memory chips that are key to advanced data facilities, as well as technology for a network upgrade. 5G and artificial intelligence.

The United States is working to consolidate its technological cooperation with Japan, South Korea and Taiwan, while trying to increase its domestic manufacturing of semiconductors, amid China’s own investment in computer chips.

Friday’s deal “symbolizes the investment and integration of our two economies and supply chains,” said US Ambassador to Japan Rahm Emanuel, who has been promoting economic security between the two allies. “And that will only accelerate from here on out.”

Nishimura has highlighted the US-Japan alliance in semiconductors, energy and other areas.

Japan was once the world’s leading computer chipmaker, but its status has eroded over the past two decades, and the country is increasingly concerned about falling behind.

Japan has allocated 476 billion yen ($3.3 billion) in subsidies for a new factory in southern Japan’s Kumamoto prefecture, which is being built in a partnership between Taiwan Semiconductor Manufacturing Co., Sony Group and Denso Corp. .

Japan will also provide up to 92.9 billion yen ($644 million) to another facility in central Japan’s Mie prefecture, built jointly by Western Digital Corp. and Kioxia Corp.

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