Japan to propose legal scheme to subsidize local chip factories – Nikkei Asia

The Japanese government will set up a legal structure for subsidizing the construction of new domestic semiconductor plants, including Taiwan Semiconductor Manufacturing Co. Ltd.'s planned Kumamoto Prefecture facility, Nikkei Asia reported Nov. 8.

The government is seeking to amend a law that applies to companies developing 5G wireless technology and to designate semiconductors a new priority field. Specific rules on the subsidization of facilities is set to be added to the legislation in a bid to support domestic supplies.

The proposals will be submitted as early as December.

Semiconductor facilities that qualify for the subsidy may be required to maintain steady production, investment and technological development. The chip plants may also be required to increase output in cases of supply shortages.

TSMC's Kumamoto Prefecture plant, which is expected to begin mass production by 2024, is targeted to be the first beneficiary of the subsidy program. TSMC's upcoming facility is expected to produce chips for a wide range of products, such as cars and appliances.