Micron Technology Inc is poised to land about ¥200 billion ($1.5 billion) in financial incentives from the Japanese government to help it make next-generation memory chips in the country, according to people familiar with the matter, the latest step in Tokyo’s effort to bolster domestic semiconductor production.
The US company will use the money to install advanced, EUV chipmaking equipment from ASML Holding NV at its facility in Hiroshima to fabricate DRAM chips, said the people, asking not to be identified because the agreement isn’t public. The funding is likely to be announced as Japanese Prime Minister Fumio Kishida was to meet yesterday with a delegation of chip executives, including Micron chief executive officer Sanjay Mehrotra.
Tokyo Electron Ltd spearheaded a rally in chipmaking gear suppliers, particularly those that provide gear or technology that support EUV.
Photo: REUTERS
The financing is the latest sign of Japan’s ambitions in developing its own semiconductor industry, a potential backup to Taiwan amid intensifying tensions between the US and China. The government is already spending billions of dollars to encourage Taiwan Semiconductor Manufacturing Co (台積電) to add production capacity in the country, and to finance a domestic chip venture, Rapidus Corp, with aspirations to make 2-nanometer chips by 2027.
The Micron deal will bring EUV equipment to Japan for the first time, a step toward cutting-edge manufacturing the government has sought.
The agreement is also a retort to Beijing, which launched a cybersecurity review of the Boise, Idaho-based company after US President Joe Biden's administration leveled sweeping restrictions on chip-related exports to China. That threatens the last American memorychip maker’s ability to sell into China, where it now gets about 11 percent of its revenue.
Kishida would receive leaders from the Group of Seven countries, including Biden, in Hiroshima between May 19 and May 21.
“Micron’s Hiroshima factory will play a key role in the G-7’s ambition to strengthen semiconductor chip supply chains,” said Akira Minamikawa, an analyst with the research firm Omdia. “It is the most important location for the US company.”
Micron’s Hiroshima factory, a former production site for the now-defunct Elpida Memory Inc, houses some of the US firm’s best engineers, Minamikawa said. Japanese Ministry of Economy, Trade and Industry said last year it would provide as much as ¥46.5 billion to Micron for production at the facility.
The US company has invested more than US$13 billion in Japan since 2013, including for a push last year to produce what it calls one-beta DRAM chips. The latest funding will help Micron produce with what it calls one-gamma production, a more advanced technology that Micron plans to launch later next year. Suppliers that will benefit from Micron’s investments include Tokyo Electron Ltd, as well as ASML of the Netherlands.
Micron is expected to contribute its own capital to the Hiroshima expansion, although the specific amount could not be learned. The city of Hiroshima is also expected to support the project.
Micron survived fierce industry consolidation through a string of acquisitions in prior downturns. While it’s added scale, something that helps with the brutal cost competition of manufacturing memory, it’s still much smaller than Samsung Electronics Co, the leader in the memory chip industry.
As the industry hit a supply glut this year, Micron reported a loss of more than US$2 billion in the latest quarter, as the selling price of memory chips fell below the cost of production. Micron’s management reacted with what they called a historically quick response, cutting pay, jobs and production and calling on its peers to follow suit. The company has said that the second half of this year should prove the bottom for the market for DRAM particularly if others also cut production.
The only other US company still involved in the memory chip industry at scale is Western Digital Corp, which doesn’t manufacture its own products, instead relying on partner Kioxia Corp’s facilities in Japan to make flash memory. Micron has used its status as the lone US memory maker to push Washington to subsidize the return of domestic manufacturing in the US. Its executives have been leading voices in the lobbying of government.
Unlike rivals Samsung and SK Hynix Inc, Micron didn’t move any of its wafer fabrication work to mainland China. Outside of its home country, Micron has plants in Taiwan, Singapore and Japan, holdovers from past acquisitions.
While that makes Micron less vulnerable to any actions by Beijing, its close relationship with Washington’s efforts to bolster chip production domestically may have contributed to China’s regulatory scrutiny. Like other US chipmakers, Micron is still dependent on the global electronics supply chains that often run through Chinese factories.
Merida Industry Co (美利達) has seen signs of recovery in the US and European markets this year, as customers are gradually depleting their inventories, the bicycle maker told shareholders yesterday. Given robust growth in new orders at its Taiwanese factory, coupled with its subsidiaries’ improving performance, Merida said it remains confident about the bicycle market’s prospects and expects steady growth in its core business this year. CAUTION ON CHINA However, the company must handle the Chinese market with great caution, as sales of road bikes there have declined significantly, affecting its revenue and profitability, Merida said in a statement, adding that it would
RISING: Strong exports, and life insurance companies’ efforts to manage currency risks indicates the NT dollar would eventually pass the 29 level, an expert said The New Taiwan dollar yesterday rallied to its strongest in three years amid inflows to the nation’s stock market and broad-based weakness in the US dollar. Exporter sales of the US currency and a repatriation of funds from local asset managers also played a role, said two traders, who asked not to be identified as they were not authorized to speak publicly. State-owned banks were seen buying the greenback yesterday, but only at a moderate scale, the traders said. The local currency gained 0.77 percent, outperforming almost all of its Asian peers, to close at NT$29.165 per US dollar in Taipei trading yesterday. The
RECORD LOW: Global firms’ increased inventories, tariff disputes not yet impacting Taiwan and new graduates not yet entering the market contributed to the decrease Taiwan’s unemployment rate last month dropped to 3.3 percent, the lowest for the month in 25 years, as strong exports and resilient domestic demand boosted hiring across various sectors, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. After seasonal adjustments, the jobless rate eased to 3.34 percent, the best performance in 24 years, suggesting a stable labor market, although a mild increase is expected with the graduation season from this month through August, the statistics agency said. “Potential shocks from tariff disputes between the US and China have yet to affect Taiwan’s job market,” Census Department Deputy Director Tan Wen-ling
UNCERTAINTIES: The world’s biggest chip packager and tester is closely monitoring the US’ tariff policy before making any capacity adjustments, a company official said ASE Technology Holding Inc (日月光投控), the world’s biggest chip packager and tester, yesterday said it is cautiously evaluating new advanced packaging capacity expansion in the US in response to customers’ requests amid uncertainties about the US’ tariff policy. Compared with its semiconductor peers, ASE has been relatively prudent about building new capacity in the US. However, the company is adjusting its global manufacturing footprint expansion after US President Donald Trump announced “reciprocal” tariffs in April, and new import duties targeting semiconductors and other items that are vital to national security. ASE subsidiary Siliconware Precision Industries Co (SPIL, 矽品精密) is participating in Nvidia