Japan invests $500 million in advanced chip manufacturing

Today, Japan announced it will invest up to 70 billion yen ($500 million) in a new semiconductor company led by technology firms such as Sony Group Corp and NEC Corp to accelerate its resurgence as a leading chipmaker.

The new company will be called Rapidus and is expected to start producing chips in the second half of this decade.

As the U.S.-China trade conflict intensifies and Washington restricts access to Beijing’s advanced semiconductor technology. Japan is accelerating the revitalization of its chip production base to ensure that automakers and information technology companies do not miss out on key components.

Japan is also worried that China may try to control Taiwan, a global center for advanced chip manufacturing.

The Japanese government has offered financial support to help foreign chipmakers build factories in Japan, including 400 billion yen for Taiwan Semiconductor Manufacturing Co (TSMC), the world’s leading logic chipmaker to build a factory in Kumamoto Prefecture to supply semiconductors to Sony and auto parts maker Denso Corp.

Previously, Japan also offered 93 billion yen in subsidies in July to help memory chipmakers Kioxia Corp and Western Digital Corp expand production in Japan in September. U.S. chipmaker Micron Technology has pledged $46.5 billion to increase production at its Hiroshima plant.

According to the report, the Japanese government will establish a new research center for the development of sub-2nm semiconductors by the end of 2022.

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