Micron announces $4.9b chip investment in Japan after PM Kishida meets industry execs

TOKYO – Micron said on Thursday it will invest up to 500 billion yen (S$4.9 billion) to produce next-generation semiconductors in Japan after Prime Minister Fumio Kishida held talks with some of the world’s biggest chipmakers.

Mr Kishida is trying to boost the domestic chip industry after weaknesses in global semiconductor supply chains were exposed by developments including the pandemic and the ongoing US-China tussle over advanced tech.

Attendees at the Kishida meeting on Thursday included senior executives from Taiwan Semiconductor Manufacturing Company (TSMC), South Korean giant Samsung and US titans Intel, Micron and IBM.

“Micron expects to invest up to 500 billion yen in 1-gamma process technology over the next few years, with close support from the Japanese government,” the firm said in a statement, referring to the production of advanced Dram memory chips.

The investment will “enable the next wave of end-to-end technology innovation such as rapidly emerging generative artificial intelligence applications”.

Micron added that it will be the first firm to bring extreme ultraviolet chip-making to Japan. It described the tech as the “most sophisticated semiconductor manufacturing process in the world”.

Mr Kishida told the chip executives that “the government will work towards further expansion of direct investment in Japan and support for the semiconductor industry”, but there were no details on any financial support from Tokyo.

Bloomberg News earlier reported that the Japanese Premier is set to hand Micron US$1.5 billion (S$2 billion) in incentives.

Japan has already agreed to pour half a billion dollars into a new project to develop and make next-generation chips domestically. The deal involves eight major companies, including Sony, SoftBank and Toyota, which are partnering each other in a new firm. The firm, called Rapidus, hopes to begin mass production by 2027.

TSMC and Sony have also inked their own partnership for a US$7 billion plant in Japan.

In April, Europe, too, announced plans to ramp up local chip production, with a goal of doubling its current global market share to 20 per cent by 2030.

Chips are the lifeblood of the modern global economy, powering everything from cars to smartphones, and they are forecast to become a US$1 trillion industry globally by 2030.

Much of the world’s semiconductor manufacturing is based in Taiwan.

Fears have grown about the impact of any Chinese military action to seize the self-ruled island, which China claims as its territory.

The chip industry moves by Japan and Europe come as the United States and China lock horns over access to advanced semiconductors. Washington has in recent years sought to prevent advanced US chip tech from being exported to China, citing national security concerns.

Japan and the Netherlands recently announced their own export restrictions on chip items, without naming China.

Still, Beijing reacted angrily, and has called for a World Trade Organisation review of the measures.

In April,

the Chinese authorities also announced an investigation into Micron,

which they said was intended to “safeguard national security”.

Mr Kishida’s meeting with chip firms came a day before he hosts Group of Seven (G-7) leaders for a summit in the city of Hiroshima.

G-7 leaders are expected to call for “de-risking” of crucial supply chains, and to warn of the risks of “economic coercion” by China. AFP