The Nikkei reported on Saturday that Micron Technology will invest 1.5 trillion yen ($9.6 billion) to construct a new plant in Hiroshima, western Japan, to manufacture sophisticated high-bandwidth memory chips.
According to the Nikkei, the U.S. chipmaker plans to begin construction at an existing site in May of next year and start shipping around 2028.
Japan’s Ministry of Economy, Trade, and Industry will contribute up to 500 billion yen to the project.
Japan’s government is providing substantial subsidies to entice international chip manufacturers like Micron and Taiwan Semiconductor Manufacturing Co. to invest in the country’s aging semiconductor industry.
Additionally, it is financing the building of a facility that will use IBM to manufacture sophisticated logic chips in large quantities.
Investment in data centres and the development of artificial intelligence are driving demand for HBM chips.
According to the Nikkei, Micron will be able to compete with market leader SK Hynix and diversify production away from Taiwan by expanding its operations in Hiroshima.
