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Micron to Get $320 Million From Japan to Make Advanced Chips

(Bloomberg) -- Japan will subsidize US memory maker Micron Technology Inc.’s push to produce its new advanced chips in Hiroshima, as the tech sector braces for a collapse in demand.

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Japan’s Ministry of Economy, Trade and Industry said it would provide as much as 46.5 billion yen ($320 million) to Micron to help it mass produce cutting-edge memory chips at facilities in Hiroshima in western Japan. Micron had said its investments would hinge in part on the amount of the local government’s support.

The Boise, Idaho-based chipmaker said it will begin producing the new chips -- which will have double the memory capacity of its existing chips -- in the spring of next year.

“We believe this will further strengthen the US-Japan partnership in semiconductors,” said METI chief Yasutoshi Nishimura at a regularly scheduled press briefing, where he announced the plan on Friday.

The news comes shortly after a visit by US Vice President Kamala Harris to Tokyo, where she said that Japan plays a “critical role” in building resilient supply chains for chips. The US is rallying allies in Asia to build redundancies and help it slow the technological ascent of China.

Harris Says Japan Plays ‘Critical Role’ in Chips Supply Chain

Japan relinquished the lead in semiconductor production decades ago, but it remains home to some of the world’s biggest makers of chip tools and chip materials such as silicon wafers and photomasks.

Micron acquired the Japanese facilities in 2013 when it bought Elpida Memory, which went under after creditors refused to bankroll attempts by the then-No. 3 maker of DRAM to keep investing in an economic downturn. The US chipmaker is now one of the top three memory producers in the world, alongside South Korea’s Samsung Electronics Co. and SK Hynix Inc.

Chipmakers including Micron are cutting back on machinery spending or reducing output as they seek a better balance of supply and demand for a plunge in demand. Japan’s Kioxia Holdings Corp. said it will cut output of new memory chips by 30% beginning next month, while Samsung and SK Hynix have also signaled a reduction in output in recent weeks.

Kioxia to Cut Output of New Memory Chips by 30% From October

Micron Braces for Massive Plunge in Demand by Slowing Production

(Updates with details about advanced chip production in third paragraph)

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