Japan to give Micron Tech up to $320 million to boost Hiroshima chip production

TOKYO, Sept 30 (Reuters) – Japan will give Micron Technology Inc ( MU.O ) up to 46.5 billion yen ($320 million) in subsidies, the industry ministry said on Friday, so it can make advanced memory chips at its Hiroshima factory. Although the US chipmaker will adjust capital investment elsewhere.

The announcement, which follows a visit to Japan by U.S. Vice President Kamala Harris, is the latest example of growing tensions and technology competition with China amid increased cooperation between Tokyo and Washington in chip manufacturing.

“Micron appreciates the support of the Japanese government and is proud to be a global partner in expanding semiconductor production and innovation in Japan,” said Manish Bhatia, Micron’s vice president of global operations, in a press release.

Micron says it will build its new 1-beta dynamic random access memory (DRAM) chips at its Hiroshima plant.

The US chipmaker on Thursday cut overall investment plans by 30% as demand for personal computers and smartphones fell. Read more

U.S. Ambassador to Japan Rahm Emanuel said in a statement, “Today’s milestone announcement by MET (Ministry of Economy, Trade and Industry) and Micron demonstrates the investment and integration of the two economies and supply chains.” And this will only accelerate from here on out.

It comes after it in July paid 92.9 billion yen to U.S. company Western Digital Corp ( WDC.O ) to boost flash memory chip production, which it operates with its Japanese partner Kyoxia Holdings. Exit from Toshiba Corporation (6502.T).

Kyoxia said on Friday it would cut production at two plants in Japan by 30% from October, “in line with current market conditions”.

The announcement about Western Digital’s subsidy came before then-Industry Minister Koichi Hagida traveled to the United States for semiconductor cooperation talks, agreeing to establish a joint research center for next-generation chips.

In Japan this week, Harris spoke to semiconductor-related business leaders about incentives available to manufacturers in the United States following the passage of a $52 billion subsidy bill. Read more

Japan is financing Taiwan Semiconductor Manufacturing Co ( 2330.TW ) to build a chip factory in Japan, along with Sony Corp ( 6758.T ) and auto parts maker Denso Corp ( 6902.T ).

Once the world’s largest center for semiconductor production, Japan has seen its share of global production shrink as chipmakers expand capacity elsewhere, particularly in Taiwan, which accounts for most of the world’s sub-10 nanometer semiconductors used in smartphones and other products.

($1 = 144.7000 yen)

Reporting by Tim Kelly and Kaori Kaneko; Editing by Chang-Ran Kim and Christopher Cushing

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