In boost for semiconductor ambitions, Japan approves US$1.3 billion in subsidies for US chip firm Micron’s plant in Hiroshima

“The market is rough now, but it’s essential that we invest in times like these,” Nishimura said at a regular news conference, referring to an industrywide slump that has weighed on Micron’s earnings. “This is to secure a supply of cutting-edge chips that Japan will need for its future economic security.”

The approval marks a win for Micron as it grapples with uncertainty in China, one of its largest markets.

Tokyo has set aside a maximum ¥167 billion to help cover Micron’s production costs and as much as ¥25 billion for development costs, Nishimura said. Micron has said it plans to spend about ¥500 billion and produce what it calls one-gamma technology in Japan.

The government was preparing subsidies of around ¥200 billion for Micron’s Hiroshima factory, Bloomberg previously reported.

Tokyo’s support comes as similar efforts by the US to bolster domestic chip production are getting stymied by labour issues and slow delivery of promised funding.

Construction at a TSMC plant in southern Japan has been proceeding relatively smoothly through round-the-clock shifts and a government pledge to pay for almost half the cost.

TSMC puts hopes in Japan chip plant as US project disappoints

Tokyo is in talks about support for a second TSMC plant in Japan, and it is funding home-grown Rapidus Corp to make the country’s own cutting-edge chips.|

Micron, which bought former Japanese DRAM maker Elpida Memory’s operations in 2013, said it employs more than 4,000 engineers and technicians in Japan.

“If there are good jobs, young people will stay closer to home and create positive ripple effects for the regional economy,” Nishimura said. “We hope this will also help nurture chip-related talent.”