Japan to provide Micron with up to $320 million to boost Hiroshima chip production

TOKYO, Sept 30 (Reuters) – Japan will provide Micron Technology (MU.O) with subsidies of up to 46.5 billion yen ($320 million) to help its Hiroshima factory, Japan’s trade and industry ministry said on Friday. Making advanced memory chips as the U.S. chipmaker slashes capital investments elsewhere.

The financial aid, announced after U.S. Vice President Kamala Harris’ visit to Japan, is the latest example of Washington and Tokyo stepping up cooperation on chip manufacturing amid heightened tensions and technology competition with China.

“Micron appreciates the support of the Japanese government and is proud to be Japan’s global partner in expanding semiconductor production and advancing innovation,” said Manish Bhatia, executive vice president of global operations at Micron, in a release. The company added that the Hiroshima plant will produce new 1-Beta dynamic random access memory (DRAM) chips there.

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Micron said on Thursday it would cut its overall investment plan by 30% due to falling demand for PCs and smartphones.read more

“The landmark announcement today by METI (Department of Economics, Trade and Industry) and Micron symbolizes the investment and integration of our two economies and supply chains,” U.S. Ambassador to Japan Rahm Emanuel said in a statement. “And that’s only going to accelerate from here,” he added.

The latest part of Japan’s plan to back domestic chip production was a 92.9 billion yen offer in July to U.S. firm Western Digital Inc (WDC.O) to boost flash memory chips at a Japanese factory with local partner Kioxia Holdings after production. Spin-off from Toshiba Corporation (6502.T).

The news came before then-Industry Minister Koichi Hagida traveled to the U.S. for talks on semiconductor cooperation that led to an agreement to establish a joint research center for next-generation chips.

This week in Japan, Harris spoke with the heads of semiconductor-related businesses about the incentives U.S. manufacturers could get after passing legislation providing $52 billion in subsidies.read more

Japan has also provided money to TSMC (2330.TW) to build chip factories in Japan with Sony (6758.T) and auto parts maker Denso (6902.T).

Japan was once the world’s largest semiconductor production center, but its share of global output is shrinking as chipmakers expand capacity elsewhere, especially in Taiwan, which makes most of the world’s use in smart Sub-10nm advanced semiconductors for cell phones and other products.

(1 USD = 144.7000 yen)

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Reporting by Tim Kelly and Kaori Kaneko; Editing by Chang-Ran Kim and Christopher Cushing

Our Standard: The Thomson Reuters Trust Principles.

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