Japan is looking to stump up about half the setup costs of semiconductor factories built in the country and attract US manufacturers as it looks to shore up its chip supplies, senior Japanese officials have said.
Japanese Prime Minister Fumio Kishida’s record 56 trillion yen (US$491 billion) fiscal stimulus unveiled on Friday did not specify how much money would be made available, but he promised that his government would keep looking to attract chipmakers to set up production facilities in Japan.
Those facilities include a new US$7 billion chip factory in western Japan planned by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Sony Group Corp.
“TSMC has been a big topic recently for our national economic security,” Kishida said on Friday. “But it doesn’t end there. It’s important we attract US chipmakers and take other action to increase possibilities for the private sector.”
Japanese Minister of Economy, Trade and Industry Koichi Hagiuda said that Japan was willing to pay half the costs or more, while confirming that the final amount to be set aside has yet to be decided.
The comments come amid local media reports that Tokyo is planning to budget about US$6.7 billion in an upcoming extra budget to support efforts to enhance the nation’s chip facilities.
Shoring up Japan’s chip manufacturing expertise and capacity would provide essential support for the needs of domestic firms such as Toyota Motor Corp, Nintendo Co and Sony, each of which has faced severe production challenges due to silicon shortages. The task has become a national priority for Kishida as he emphasizes the importance of economic security.
“Given a trend for countries to provide half the initial setup costs or more, we’d also like to think along those lines for new chip fabs,” Hagiuda said.
The first recipients of government help are likely to be Sony and TSMC for their factory, which Kishida promised to help get built.
TSMC approved an initial investment of up to US$2.12 billion to create a Japan-based subsidiary, the Taiwanese chipmaker said earlier this month, with Sony Semiconductor Solutions Corp investing US$500 million in that subsidiary.
However, Tokyo has so far not made clear how much of the remaining US$4.4 billion it would pay or which other companies are investing.
As the auto industry’s move toward more automated and electric vehicles accelerates, each vehicle is to require more semiconductors for sensors and processing of environmental data, escalating the need for chips.
Construction of the TSMC fab is set to begin next year, with production expected to start by the end of 2024. The chip plant is expected to create about 1,500 jobs and have a monthly capacity of 45,000 12-inch wafers, initially to be made with mature 22 and 28-nanometer technologies.
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