Japan cuts chip manufacturing costs in half to attract U.S. manufacturers
Latest update time：2021-11-24 10:26
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Japan hopes to reduce the setup costs of semiconductor factories built in the country by about half and attract U.S. manufacturers to bolster its chip supplies, according to senior Japanese officials.
The record 56 trillion yen ($490 billion) fiscal stimulus package unveiled by Prime Minister Fumio Kishida on Friday did not specify how much money would be provided, but the prime minister pledged that his government would continue to seek to attract chipmakers to set up production facilities in Japan.
The facilities include a $7 billion new chip factory planned by Taiwan Semiconductor Manufacturing Co. and Sony Corp. in western Japan.
“TSMC has been a big topic for our nation’s economic security recently,” Kishida said on Friday. “But it’s not over. It’s important that we attract U.S. chipmakers and take other actions to increase possibilities in the private sector.”
Trade Minister Koichi Hagiuda, meanwhile, hinted that Japan was willing to pay half or more of the cost, while confirming that the final amount to be disbursed had not yet been determined.
The comments came as local
media
reported that the government plans to allocate about $6.7 billion in the upcoming extra budget to support efforts to strengthen the country's chip facilities.
Strengthening Japan's chipmaking expertise and capabilities will provide essential support for demand from domestic companies such as Toyota Motor Corp., Nintendo Co. and Sony Corp., all of which face severe production challenges due to silicon shortages. Kishida has made the task a national priority as he stresses the importance of economic security.
“Given the trend of countries providing half or more of the initial setup costs, we would also like to think about new chip factories along these lines,” Hagiuda said.
The first to receive government help may be factories owned by Sony and TSMC, with Kishida
promising
to help them build factories.
The Taiwanese chipmaker said earlier this month that TSMC approved an initial investment of up to $2.12 billion to create a Japanese subsidiary, with Sony Semiconductor Solutions investing $500 million in the unit. However, the government has so far not made clear how much of the remaining $4.4 billion it will pay, or which other companies are investing.
As the automotive industry accelerates its move toward more automated and electric vehicles, each vehicle will require more semiconductors for sensors and environmental data processing, increasing demand for chips.
Local media in Japan
and Taiwan reported that Denso, one of Japan's largest auto parts companies, could be one of the potential partners in a TSMC deal.
Denso declined to comment on the reports, as did all other major Japanese automakers.
TSMC's wafer fab will start construction in 2022 and is expected to be put into production at the end of 2024. The chip plant is expected to create about 1,500 jobs and have a monthly production capacity of 45,000 12-inch wafers, initially using mature 22 and 28-nanometer technologies.
As Japan plans to restart its industry, China, the United States and even the European Union are also looking to strengthen their own industries.
U.S. Commerce Secretary Gina Raimondo said this week that the United States wants to both increase its own chip production and work more closely with allies to ensure supplies, creating opportunities for Japanese industry cooperation and expansion.
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