Japan will provide 600 billion yen ($5.2 billion) as part of its fiscal 2021 supplementary budget to support advanced semiconductor manufacturers, Nikkei reported.
Around 400 billion yen ($3.47 Billion) will be towards investment in new chip manufacturing unit that will be set up by TSMC (Taiwan Semiconductor Manufacturing Co), the world's leading chipmaker in partnership with Sony Semiconductor Solutions Corporation.
The chip manufacturing plant will cost 800 billion yen ($7 billion) to build. The construction is scheduled to commence in 2022 and the plant is expected to start producing chips by 2024.
The joint venture company, to be called Japan Advanced Semiconductor Manufacturing, Inc. (“JASM”), will be set up in Kumamoto, Japan to provide foundry service with initial technology of 22/28-nanometer processes to address strong global market demand for specialty technologies. Sony will invest up to $500 million and will hold no more than a 20% stake in the joint company.
U.S. memory chipmaker Micron Technology and domestic plater Kioxia Holdings are other semiconductor manufacturing firms that are likely to receive subsidies from the Japanese government.
In Oct, Micron Technology announced that it plans to invest more than $150 billion globally over the next decade in cutting-edge memory chip manufacturing and research and development (R&D), including potential U.S. fab expansion.
Japan is currently pursuing an all-out strategy to lure overseas semiconductor companies, including designing generous financial incentives.
Japan lags behind South Korea and Taiwan in advanced chip manufacturing. It imports more than 60% of its semiconductors, much of them from Taiwan and China.
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