Micron expected to get US$1.5 billion from Japan for next-gen chips weeks after Beijing launched probe into the firm

The expected incentives for the last company making memory chips in the US come as Japan’s prime minister meets with top chip firms, including TSMC and Intel

The agreement is also a retort to Beijing, which launched a cybersecurity review of Micron after the US imposed sweeping restrictions on chip exports

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Micron is expected to get US$1.5 billion in incentives to expand in Japan weeks after Beijing launched a probe into the company’s China operations. Photo: Reuters

Published: 10:08am, 18 May 2023

Micron Technology Inc is poised to land about 200 billion yen (US$1.5 billion) in financial incentives from the Japanese government to help it make next-generation memory chips in the country, according to people familiar with the matter, the latest step in Tokyo’s effort to bolster domestic semiconductor production.

The US company will use the money to install advanced, EUV chip-making equipment from ASML Holding NV at its facility in Hiroshima to fabricate DRAM chips, said the people, asking not to be identified because the agreement isn’t public.

The expected government support comes as Japanese Prime Minister Fumio Kishida met Thursday with a delegation of chip executives, including Micron chief executive Officer Sanjay Mehrotra, Intel Corp chief Patrick Gelsinger and Taiwan Semiconductor Manufacturing Co chairman Mark Liu, along with executives from Samsung Electronics Co and IBM.

Minister of Economy, Trade and Industry Yasutoshi Nishimura and Deputy Chief Cabinet Secretary Seiji Kihara were among government officials present.

The financing is the latest sign of Japan’s ambitions in developing its own semiconductor industry, a potential backup to Taiwan amid intensifying tensions between the US and China. The government is already spending billions of dollars to encourage TSMC to add production capacity in the country, and to finance a domestic chip venture, Rapidus Corp, with aspirations to make 2-nanometre chips by 2027. The Micron deal will bring EUV equipment to Japan for the first time, a step towards cutting-edge manufacturing the government has sought.

The agreement is also a retort to Beijing, which launched a cybersecurity review of the Boise, Idaho-based company after the Biden administration levelled sweeping restrictions on chip-related exports to China. That threatens the last American memory chip maker’s ability to sell into China, where it now gets about 11 per cent of its revenue. Kishida will receive leaders from the Group of Seven countries, including US President Joe Biden, in Hiroshima between May 19 and May 21.