Japan Allocates $5.2 Billion To Fund Chip Plants By TSMC and Others

Japan is allocating about $5.2 billion of its fiscal 2021 supplementary budget to support advanced semiconductor manufacturers, Nikkei has learned. From the report: The government plans to invest about 400 billion yen in a new factory set up by the world's largest contract chipmaker Taiwan Semiconductor Manufacturing Co. in Kumamoto prefecture, southwest Japan. The remaining 200 billion yen will go toward setting up other new factories, with projects under consideration including by U.S. memory chipmaker Micron Technology and Japan's Kioxia Holdings. The Japanese government is considering making semiconductors a new area of focus under a law targeting companies developing high-speed 5G technologies, meaning it would approve investment plans for their factories under the revised law. [...] The 600 billion yen fund would cover subsidies over several years. Companies would receive support under the condition that they would increase production when there is supply shortage, as the Japanese government hopes to ensure a stable domestic chip supply.

A clear signal

[Klaxton]

$5 billion is chicken feed these days when it comes to fabrication plants, but it does clearly signal that the government will provide subsidies and probably other substantial incentives. Same with many other countries, nobody should complain when the USA does similar participation.

Re:

[hjf]

Japan's debt is the highest in the world. Around 12 Trillion USD. And most of its debt is "owned" by its central bank.

The yen, on the other hand, is extremely stable.

In other words, Japan has the world's blessing to print as much money as it pleases. Even the US went on a money printing spree last year and inflation was around 6%.

Why does Japan get special treatment?

(on the other hand, Japan's wages are stagnating, the salaries are terrible compared to the rest of developed nations, and the cost of living i

Re: A clear signal

[antus]

It changes enough to significantly affect car export prices.... But im very glad to see more geographically distributed TSMC fabs around the world!

Re: A clear signal

[St.Creed]

It's not. Or at least, not solely. Me and my friends are arguing that the EU should do the same, because if you don't produce chips locally, you have no autonomy as a government. That's a real issue if you want to remain an independent nation.

Basically, chips are the new oil, except with oil it is what it is, but with silicon you can actually make sure you have strategic control over at least basic supplies.

No modern government can run without secure chips. Japan, China, the USA and the USSR just realised t

Re:

[luis_a_espinal]

It's protectionism and nativism. Straight out of Trump's playbook. If you're taking a page from Trump that's a good sign you're doing it wrong.

Not necessarily. It's public investment on strategic assets. I don't recall where I read this, but Japan does two things (out of many things, obviously):

1. It imports wood for construction, even though it has the forest capacity to produce its own at a cheaper price.
2. It subsidizes local rice production, even though it is significantly cheaper to import rice from, say, China or Vietnam.

This is protectionism, very expensive protectionism. Why you might ask? Japan finds it strategic to 1) protect its forests a

Re:

[AmiMoJo]

I can't find a price tag for the fab in Japan, but the one in Arizona is around $12 billion. So $5bn is hardly "chicken feed", it's probably about half the cost of the new fab.

Re:

[Klaxton]

In the news I am seeing, the Arizona fab will cost $20 billion. Samsung just announced a new one going up in Texas for $17 billion. Meanwhile this article states that Japan will contribute about $3.5 billion for the Taiwan Semiconductor fab and the remaining $1.7 billion will go towards all other "projects under consideration".

Import supply shortage is good for US in long run

[Anonymous Coward]

An import supply shortage forces each country to be more self sufficient. More local factories is good.

Re:

[Ostracus]

Unless it's the plant that cranks out toxic waste. People don't want that so local.

Re:

[sabbede]

Then better for it to be in a nation that takes toxic waste containment and cleanup seriously rather than one that will just have slaves dump it in the river.

Re:

[hey!]

When the alternative is factories in China under the current regime, sure. Latest news -- Chinese ships have gone dark on shipping trackers [cnn.com] so if you're trying to run a lean, low-inventory manufacturing operation you have no idea when you are going to get the Chinese parts you need.

It's fine to do international capitalism, as long as you're doing it with a country that's got a legal and regulatory framework that supports international trade. Shipping disruptions from COVID were a contributing factor to th

$5.2 Billion isn't even one modern TSMC fab

[Nova Express]

Samsung is spending $17 billion to build a single fab in Texas [battleswarmblog.com].

Still, with everything running flat out, I'm sure TSMC can make use of the capacity.

Japan business Entry procedures

[spinitch]

The recently revised business purpose short term entry procedures allows visits but with an extensive monitoring plus restrictions in venturing out that local Japan business must sponsor and monitor compliance. Visitors pledge to follow unclear rules. Maybe TSMC will get more lenient treatment. Main beneficiaries of new entry procedures for residents.

Meanwhile, in America...

[Miles_O'Toole]

Interest remains centred on finding even more ways to privatize public infrastructure and subsidize the fossil fuel sector.