Japan arranging subsidies for Samsung chip facility -source

By Maki Shiraki

TOKYO (Reuters) - Japan is arranging subsidies that could be worth around 15 billion yen ($110 million) to South Korea's Samsung Electronics Co for a chip facility it is considering setting up near Tokyo, a source with direct knowledge of the matter said.

Samsung, the world's largest maker of memory chips, would construct the facility including its first chip packaging test line in Japan near its existing research and development centre in Yokohama, Reuters reported in late March.

The tech firm's investment would come at a time of easing tensions between Japan and South Korea as the United States urges its allies to work together to counter China's rising might in chips and other technologies.

The facility could cost around 40 billion yen to set up, of which about a third would be subsidised by the Japanese government, said the source, who declined to be named because the information is not public.

Japan's economy ministry said that no decisions have been made regarding any subsidy for Samsung and no specific proposal has been received from the company.

Samsung said that nothing had been decided.

Japan's Prime Minister Fumio Kishida on Thursday plans to meet with executives from leading chip firms including Samsung to strengthen multilateral cooperation.

Kishida met last month with South Korean President Yoon Suk Yeol in Seoul in the first such visit for 12 years, with the two leaders pledging to boost cooperation.

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world's largest contract chipmaker, last year opened a research centre in Tsukuba city, northeast of Tokyo, at a cost of about 37 billion yen, including 19 billion yen of Japanese government subsidies.

Japan said last month it would give 260 billion yen in subsidies to domestic chipmaker Rapidus, which is building a factory on the northern island of Hokkaido, in addition to 70 billion yen of government funding secured earlier.

($1 = 135.0500 yen)

(Reporting by Maki Shiraki; Additional reporting by Heekyong Yang and Tim Kelly; Writing by Sam Nussey; Editing by Jamie Freed and Chang-Ran Kim)