The Japanese Ministry of Industry announced on Tuesday its intention to extend subsidies amounting to 242.9 billion yen ($1.64 billion) to support efforts to expand memory chip production in Mie and Iwate prefectures.
This financial support serves as a lifeline for companies facing challenges due to a downturn in the NAND flash chip market. Merger talks between the companies in this sector stalled late last year, partly due to opposition from investors. Japan's influential industry ministry aims to reestablish the country as a prominent hub for chip manufacturing by extending subsidies to both domestic and foreign chipmakers. This initiative seeks to secure chip supply amid ongoing trade tensions between China and the United States.
Japan's Industry Minister highlighted the expected growth in the memory market, particularly for generative AI applications. He emphasized collaborative investments as a partnership to meet the global demand for memory solutions.
Companies in this sector have notably benefited from investments in generative AI, with chipmaker Nvidia utilizing their high bandwidth memory (HBM) chips.
Originally spun off from a pioneering company, which developed NAND technology in the 1980s, when Japan played a dominant role in the global chipmaking industry. An industry ministry official noted that as data usage continues to rise, demand for memory, particularly NAND, is expected to grow in accordance with its characteristics.
Companies involved in these initiatives have announced plans to make strategic adjustments within the industry.