Micron Technology Inc is to spend ￥1.5 trillion (US$9.6 billion) to build a plant in western Japan to make memory chips for artificial intelligence (AI) applications, the Nikkei reported on Saturday.
The move comes as Micron seeks to diversify advanced chip production outside of Taiwan, the Nikkei article said, citing people familiar with the matter.
The new factory will manufacture high-bandwidth memory (HBM) chips, a key component for working with AI processors such as those made by Nvidia Corp, the report said.
Photo: Bloomberg
Micron would build the facility within the compound of its Hiroshima plant, starting in May next year, with plans to launch HBM shipments in about 2028, the Nikkei said.
The Japanese Ministry of Economy, Trade and Industry would subsidize up to ￥500 billion of the costs for the project, the newspaper said.
Japan has already set aside about ￥5.7 trillion in a plan initiated in 2021 to rebuild the nation’s chipmaking prowess. The country is set to secure another ￥252.5 billion in an extra budget to further support AI and semiconductor development.
The budget, which Japanese Prime Minister Sanae Takaichi’s Cabinet approved on Friday, is heading to the parliament for approval.
The government has awarded Micron’s Hiroshima factory ￥774.5 billion and has also provided funds to other companies including global foundry giant Taiwan Semiconductor Manufacturing Co (台積電) and homegrown Rapidus Corp.
Micron is competing in HBM against South Korea’s SK Hynix Inc and Samsung Electronics Co. Demand for the chips has surged from tech firms like OpenAI and Meta Platforms Inc as they focus on training and operating AI services.
The race to build AI infrastructure has already raised energy bills in areas near large data centers. It has also lifted the valuations of the world’s top memory makers. Shares of Samsung, SK Hynix and Micron have in the past few months surged as inventories dwindle and supply challenges crystallize.
SK Hynix last month said that it had sold its entire memorychip lineup for next year, while Micron expects supply would remain tight into next year.
“Everything that’s related to memory — advanced or conventional — is in very strong demand and supply is lagging,” CLSA Securities Korea Ltd research head Sanjeev Rana said. “We are likely to see this DRAM and NAND price upturn lasting several quarters from here.”
Suppliers of logic chips, the kind that process data and are critical to building AI systems, may also see their business affected as their customers may refrain from placing orders if they can’t secure enough memory.
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