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Japan allocates $5.2bn to fund chip plants by TSMC and others

TSMC to produce 3NM and 5NM chips

According to Nikkei, Japan is devoting 600 billion yen ($5.2 billion) from its fiscal 2021 extra budget to boost advanced semiconductor producers.
The government wants to invest around 400 billion yen in a new facility in Kumamoto Prefecture, southwest Japan, built by Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker. The remaining 200 billion yen will be used to build new plants, with projects being considered by Micron Technology in the United States and Kioxia Holdings in Japan. The Japanese government is considering including semiconductors as a new focus area in a law aimed at firms developing high-speed 5G technology, implying that the updated law will authorize investment plans for their factories.
Micron has acquired Elpida Memory’s innovative dynamic random access memory (DRAM) chip manufacturing facility in Hiroshima Prefecture, in western Japan. The corporation has been in discussions with governments from several nations, including Japan, about production investments. In Japan, Kioxia boasts cutting-edge NAND flash memory manufacturing. In Yokkaichi city, Mie prefecture, a new factory facility is being built that will begin operations in 2022. The company also expects to begin construction on a new industrial building in Kitakami, Iwate Prefecture, next year, with intentions to begin operations in 2023.
The 600 billion yen fund would be used to pay for subsidies over several years. The Japanese government intends to secure a stable local chip supply by assisting with the condition that companies raise production when there is a supply deficit. “While TSMC is a heated topic,” Japanese Prime Minister Fumio Kishida recently told Nikkei, “I believe it is vital to take measures to promote diverse opportunities in the private sector, such as luring US semiconductor manufacturers.” Memory chip consumption is predicted to rise in the mid-to long-term, owing to increasing digitization and data center investments. “Securing a reliable supply of advanced semiconductors (logic, memory) is the most significant security problem,” Japan’s industry ministry noted in its semiconductor reinforcement package.

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