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The subsidies will be used to fund the joint research and production of cutting-edge optical technology semiconductors
Today, the Japanese government has announced it will provide roughly $307 million in subsidies for a semiconductor project backed by NTT, Intel, and SK Hynix.
The chip specialists from Japan, the US, and South Korea, respectively, are set to collaborate on the development of optical semiconductor technology, a field that potentially offers higher data processing speeds and lower energy consumption than its electrical counterparts.
Under the current plan, the companies plan to begin producing related products by 2027.
“We hope the (project), by enabling faster communications and realizing reduced power consumption, will be a game changer in the future,” Ken Saito, minister of economy, trade and industry.
The move comes as one of the West’s latest instances of government intervention aimed at increasing domestic chip competencies and lessening reliance on China.
Japan has quietly been bolstering its position in the international semiconductor industry over th past year, typically investing indirectly in domestic chip production and adjacent technologies in efforts to carve out a niche on the world stage.
Last summer, for example, the Japan Investment Corporation (JIC) – a government-backed fund overseen by the Ministry of Economy, Trade and Industry – announced the takeover of esoteric microelectronics specialist JSR for $6.4 billion.
JSR produces photoresists, chemicals crucial for the photolithographic process used when making microchips. The company is the global leader in the photoresist market – perhaps the only aspect of the global chipmaking economy in which Japan plays a vital role.
In addition to this acquisition, in October the government announced $1.3 billion in subsidies for US firm Micron to set up a semiconductor firm in Hiroshima. Then, in December, the JIC also moved to takeover Fujitsu’s semiconductor packaging arm Shinko Electric Industries for around $4.7 billion.
According to JIC CEO Keisuke Yokoo, the government fears that Japan’s medium-sized enterprises in the microelectronics sphere will not be able to compete in the long-term with giants from rival nations in the US and China, hence requiring government support to remain competitive on the international stage.
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