Japan to give 243 bil. yen to Kioxia-Western Digital chip plants

Japan will provide a subsidy of up to 243 billion yen ($1.64 billion) to Kioxia Holdings Corp. and Western Digital Corp. to mass produce cutting-edge chips at plants they jointly run in central and northeastern Japan, the industry minister said Tuesday.

The assistance for the facilities in Mie and Iwate prefectures that produce 3D flash memory chips, expected to be used in artificial intelligence and automated driving, comes as Japan seeks to secure a stable domestic chip production and strengthen its economic security.

Economy, Trade and Industry Minister Ken Saito told a press conference the memory chip market is "expected to see major growth," adding the production of chips through cooperation between Japan and the United States also has "great significance" in terms of economic security.

The subsidy will account for about a third of the 729 billion yen slated to be invested under the plan.

Western Digital and Kioxia Holdings, which has a chip company that spun off from Toshiba Corp. under its arm, had hoped to merge in a move that would have created the world's leading producer of memory chips.

But sources close to the matter have revealed the two sides have halted talks due to opposition by South Korea's SK Hynix Inc., a major investor in Kioxia.

© Kyodo News