Japan’s government approved as much as $1.3 billion in subsidies for Micron Technology Inc.’s Hiroshima factory, part of Tokyo’s efforts to bolster next-generation chip production at home, Report informs referring to Bloomberg.
The subsidies will help the Boise, Idaho-based company install Dutch firm ASML Holding NV’s extreme ultraviolet lithography equipment to make advanced chips, Economy Minister Yasutoshi Nishimura said Tuesday. Such chips will be essential to power generative AI, data centers and self-driving technology, he said. The support covers almost 40% of Micron’s investment plans in Japan.
“The market is rough now, but it’s essential that we invest in times like these,” Nishimura said at a regular news conference, referring to an industry-wide slump that’s weighed on the US company’s earnings. “This is to secure a supply of cutting-edge chips that Japan will need for its future economic security.”
The approval marks a win for Micron as it grapples with uncertainty in China, one of its largest markets. A bipartisan group of US senators hopes to meet President Xi Jinping next week in the country, where the company faces an ongoing probe by regulators. Micron has said the investigation put half of its China sales at risk.
Tokyo has set aside a maximum ¥167 billion to help cover Micron’s production costs and as much as ¥25 billion for development costs, Nishimura said. Micron has said it plans to spend about ¥500 billion and produce what it calls one-gamma technology in Japan. The government was preparing subsidies of around ¥200 billion for Micron’s Hiroshima factory, Bloomberg previously reported.