Japan will give Micron Technology a subsidy of up to US$320 million, the trade and industry ministry said on Friday (Sep 30), to help build advanced memory chips at its Hiroshima plant, as the US chipmaker trims capital investment elsewhere.

The financial aid announcement, which follows the visit to Japan by US Vice President Kamala Harris, is the latest example of growing cooperation between Washington and Tokyo in chip manufacturing amid increasing tension and an intensifying technology rivalry with China.

“Micron appreciates the support of the Japanese government, and are proud to be a global partner in Japan’s effort to expand semiconductor production and advance innovation,” Micron’s executive vice president of global operations, Manish Bhatia, said in a press release. The Hiroshima plant will build its new 1-Beta dynamic random-access memory (Dram) chips there, the company added.

Micron on Thursday said it was cutting its overall investment plans by 30 per cent amid a fall in demand for PCs and smartphones.

“The milestone announcement today by METI (Ministry of Economy Trade and Industry) and Micron symbolises the investment and integration of our two economies and supply chains,” US Ambassador to Japan Rahm Emanuel said in a statement. “And that will only accelerate from here forward,” he added.

The latest component of Japan’s plan to bolster domestic chip production comes after it gave 92.9 billion yen (S$921 million) to US firm Western Digital Corp in July to boost flash memory chip output at a Japanese plant operated with local partner Kioxia Holdings, which was spun off from Toshiba Corp.

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That announcement came ahead of a trip to the United States by then industry minister Koichi Hagiuda for talks on semiconductor cooperation that led to an agreement to establish a joint research centre for next-generation chips.

In Japan this week Harris talked to heads of semiconductor-related businesses about incentives available to manufacturers within the United States following the passage of legislation that provides US$52 billion in subsidies.

Japan is also providing money to Taiwan Semiconductor Manufacturing to build a chip plant in Japan along with Sony Corp and auto parts maker Denso Corp.

Once the world’s biggest centre of semiconductor production, Japan has seen its share of global output shrink as chipmakers have expanded capacity elsewhere, particularly in Taiwan, which makes most of the world’s advanced semiconductors under 10 nanometres that are used in smartphones and other products. REUTERS