Japan Okays $1.3-B Subsidies For Micron Chip Plant

Japan has approved up to ¥192 billion ($1.3 billion) in subsidies for Micron Technology Inc.'s Hiroshima factory, as part of Tokyo's efforts to strengthen next-generation chip production at home, according to Yoshiaki Nohara's report for Bloomberg News.

Tokyo has earmarked a maximum of ¥167 billion to help cover Micron's production costs and up to ¥25 billion for development costs. I Photo: Micron Technology

The subsidies will assist the Boise, Idaho-based company in installing Dutch firm ASML Holding NV's extreme ultraviolet lithography equipment to manufacture advanced chips. Such chips are essential for power generation AI, data centers, and self-driving technology.

The support covers nearly 40% of Micron's investment plans in Japan. Economy Minister Yasutoshi Nishimura stated, "The market is rough now, but it's essential that we invest in times like these," referring to an industry-wide slump that has impacted 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 is a victory 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 China, where the company faces an ongoing probe by regulators. Micron has stated that the investigation puts half of its China sales at risk.

Tokyo has earmarked a maximum of ¥167 billion to help cover Micron's production costs and up to ¥25 billion for development costs.

Micron plans to spend about ¥500 billion and produce what it calls one-gamma technology in Japan. Tokyo had been preparing ¥200 billion in subsidies for Micron's Hiroshima factory, as previously reported by Bloomberg.

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