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

TOKYO, Sept 30 (Reuters) – Japan will offer up to 46.5 billion yen ($320 million) in subsidies to U.S. chipmaker Micron Technology (MU.O) to pay it back in Hiroshima, Japan’s trade and industry ministry. The factory that makes advanced memory chips said Friday.

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.

Japan said in July it would give 92.9 billion yen to U.S. firm Western Digital (WDC.O) to boost output of flash memory chips at a Japanese factory run with local partner Kioxia Holdings, which is built from Toshiba (6502.T) spun off. .

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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.

Japan’s decision to subsidize Micron’s production plans comes after the chipmaker said on Thursday it was slashing its investment plans by 30% as demand for PCs and smartphones fell.read more

Japan is also funding TSMC (2330.TW) and Sony (6758.T) and auto parts maker Denso (6902.T) to build chip plants in Japan.

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.

Taiwan’s proximity to mainland China, a shortage of chips due to COVID-19 disruptions and growing global demand for key components have raised concerns in Japan about shortages that could undermine national security.

(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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