Japan Extends Subsidies to Kioxia and Western Digital to Boost Memory Chip Production
Japan’s Ministry of Economy, Trade, and Industry has announced that it will extend subsidies worth up to 242.9 billion yen ($1.64 billion) to Kioxia and Western Digital for expanding memory chip production in Mie and Iwate prefectures. This move comes as a measure to support the two companies, which have been severely affected by the downturn in the market for NAND flash chips.
The subsidies will provide a much-needed boost to Kioxia and Western Digital, whose merger talks were stalled last year due to opposition from Kioxia investor SK Hynix. The funding aims to revive Japan’s position as a major chip center and secure chip supply amid ongoing trade tensions between China and the United States.
Ken Saito, Japan’s Minister of Economy, Trade, and Industry, expressed optimism about the potential growth in the memory market, especially in the field of generative AI. He stated, The joint investment by Kioxia and Western Digital brings together Japan and the U.S. to fulfill our responsibility to supply the memory the world needs.
SK Hynix, who recently partnered with U.S. chipmaker Nvidia, has emerged as a major player in investment in generative AI. Kioxia, which was spun off from Toshiba, standing as an industry veteran since inventing NAND in the 1980s, hopes to utilize the subsidies to regain its competitive edge.
The subsidies include 92.9 billion yen that was initially approved in 2022, along with an additional 150 billion yen. The investment will focus on the production of cutting-edge 3D flash memory, amounting to a total investment of approximately 728.8 billion yen.
The more data is used, the more memory consumption will increase, so in that sense, global demand will surely grow in accordance with NAND’s characteristics, stated an industry ministry official, emphasizing the importance of memory chips in a data-driven era.
Western Digital, which plans to spin off its flash memory business, has witnessed a 12% increase in its shares so far this year. The company aims to leverage the subsidies to further strengthen its position in the memory chip market.
With this move, Japan asserts its commitment to supporting innovation in the semiconductor industry and ensuring a stable supply of memory chips. By extending subsidies to domestic and foreign chipmakers, Japan aims to regain its prominence as a global chipmaking hub.
In conclusion, the extension of subsidies to Kioxia and Western Digital is a significant step toward revitalizing Japan’s memory chip production industry. As technological advancements continue to drive the demand for memory chips, these subsidies will provide the necessary boost for the companies to expand their production capabilities and meet the growing global demand.
