Japan Sets Aside Billions to Lure Chip Factories

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The Japanese government wants to implement a program to stimulate the construction of chip factories in Japan. In this way, the country wants to build more security in the persistent chip shortage.


The program would pool hundreds of billions of yen at NEDO. Reuters writes that this government agency promotes R & R&D. Players who want to build a chip factory in Japan can count on a subsidy to mitigate the enormous costs based on the Japanese business newspaper Nikkei.

If all goes well, that subsidy fund can be discussed in parliament in December. But, again, Taiwan’s TSMC may be the first to qualify. The company is currently looking at building a chip factory in Kumamoto, in the country’s south. There it wants to build chips for, among other things, the automotive sector, camera sensors and other purposes.

There is currently a huge shortage of chips worldwide, partly due to the ever-increasing demand and disruptions in production due to power outages, water shortages, or corona. At the same time, building additional factories is something that takes years and is extremely expensive.

At the same time, chipmakers are still considering whether such a factory is economically viable, and a substantial government injection can help. After all, it takes several years for a factory to break even and sites that produce advanced chips certainly risk becoming obsolete after a few years due to the arrival of newer, faster chips.

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