Factbox: Japan ramps up efforts to strengthen its chip industry

JSR

26/06/2023 05:02

TOKYO, June 26 (Reuters) - Semiconductor materials maker
JSR Corp's  4185.T  board will meet on Monday to discuss a
potential multi-billion dollar buyout by a government-backed
fund that would mark an acceleration of Japan's efforts to
strengthen its chip industry.
    Below are investments in Japan announced by chipmakers and
measures the government is taking to revive its semiconductor
industry. 
    
    WHICH COMPANIES ARE INVESTING?
    Taiwan Semiconductor Manufacturing Co (TSMC)  2330.TW 
announced in November a plan to build a $7 billion chip plant on
Kyushu island, with production of 12 and 16 nanometre chips
slated to begin in 2024. 
    Sony Group  6758.T  and auto parts maker Denso  6902.T ,
which will use the chips TSMC makes, are also investors. 
    U.S. memory chipmaker Micron Technology  MU.O  said in May
it planned to invest up to 500 billion yen ($3.5 billion) in
extreme ultraviolet technology (EUV) over the next few years
with support from the Japanese government. It said it would be
the first chipmaker to bring EUV technology to Japan for
production.
    Samsung Electronics  005930.KS  is considering setting up
its first chip packaging test line in Japan near its existing
research and development centre in Yokohama, sources told
Reuters in March. 
    Japan's state-backed Rapidus said in February it would build
a chip plant in Chitose, a manufacturing hub on the nation's
northern island of Hokkaido.
    Rapidus, which has a tie up with International Business
Machines (IBM)  IBM.N  to develop and produce cutting-edge 2
nanometre chips, aims to launch a prototype line in 2025. 
    
    GROWTH PLANS AND SUBSIDIES
    Japan, which has seen its share of the global semiconductor
market fall from 50% in the late 1980s to about 10%, aims to
treble sales of chips made in the country to 15 trillion yen by
2030 by encouraging investment and offering various forms of
support. 
    It has offered TSMC a 476 billion yen subsidy, or about half
the expected cost of the factory.
    Rapidus secured an initial 70 billion yen of funding from
the government, and local media reported in April that the
government was finalising a plan to provide an additional 300
billion yen.
    Japan is also arranging subsidies that could be worth around
15 billion yen to Samsung for the chip facilities it is
considering setting up, Reuters reported in May, citing a
source.
    
    EXPORT CONTROL
    Japan said in March it would restrict exports of 23 types of
chipmaking gear, aligning its technology trade controls with a
U.S. push to curb China's ability to make advanced chips.
    Japan, home to major chip equipment makers such as Nikon
 7731.T  and Tokyo Electron  8035.T , did not name China as the
target of the restrictions, saying manufacturers would need to
seek export permission for all regions.
    
    STATE-BACKED FUND
    State-backed Japan Investment Corp (JIC), which is overseen
by the powerful trade ministry, is in talks with JSR about a
buyout, the chip materials maker said.
    The fund, backed by $20 billion of government money, was set
up in 2018 to invest in Japanese companies to boost the nation's
competitiveness.
    It took over the role from the Innovation Network Corp of
Japan (INCJ), which was created in 2009 as a temporary scheme to
promote new industries and business consolidation.
    INCJ largely focused on cash-strapped or ailing firms. Its
past investments include chipmaker Renesas  6723.T  and flat
screen firm Japan Display  6740.T .
    JIC has so far focused mostly on investing in startups and
venture capital funds.
    It also participated in the bidding to take Toshiba  6502.T 
private jointly with private equity firm Japan Industrial
Partners, but later dropped out due to disagreements over
post-buyout strategies.
($1 = 143.2600 yen)

 (Reporting by Makiko Yamazaki, Sam Nussey, Tim Kelly and Miho
Uranaka; Compiled by Miyoung Kim; Editing by Jamie Freed)