G7: Micron's investment in Japan seen as US countermeasure to China

Jerry Yang, Taipei; Misha Lu, DIGITIMES Asia 0

Credit: AFP

The G7 summit of this year took place in Hiroshima, Japan, accompanied by Micron's announcement of a US$3.6 billion investment to introduce ASML's extreme ultraviolet (EUV) equipment at Micron's Hiroshima plant, aiming to build the next generation of DRAM production lines. Additionally, the "Hiroshima Accord" was jointly announced by the United Kingdom and Japan, signifying a deepening of the investment scale, worth billions of dollars, in the semiconductor and clean energy sectors. At a time of heightened geopolitical tensions between the United States and China, Hiroshima has emerged as a new strategic memory chip manufacturing hub for the US-led "Western camp" in the Asia-Pacific region, in addition to Taiwan and South Korea.

Micron's expanded investment in advanced memory chip manufacturing in Hiroshima is also seen as a new countermeasure by the US against China amid the ongoing US-China rivalry. This move comes in response to China's sudden announcement on March 31, 2023, that the products sold by Micron in China will undergo security reviews conducted by the Cyberspace Administration of China (CAC). According to Bloomberg, the agreement between Micron and the Japanese government is also a response to China's actions.

Rahm Emanuel, the US ambassador to Japan, pointed out that the agreement between Micron and Japan on the latter's financial assistance for next-gen memory chip manufacturing sets a precedent for countering China's coercion. He emphasized that the US and Japan will act together to ensure the integrity of their supply chains and provide assistance to companies targeted by China. Discussions on how to respond to China's actions will be included in the G7 communiqué, and the cooperation between Japan and Micron serves as an example of how governments can counter such actions.

On the occasion of the G7 summit in Hiroshima, Prime Minister Fumio Kishida of Japan met with key executives from various global semiconductor manufacturing industries on May 18. The attendees included Mark Liu, Chairman of TSMC, Kye Hyun Kyung, CEO of Samsung Electronics, Pat Gelsinger, CEO of Intel, Sanjay Mehrotra, CEO of Micron, Prabu Raja, President of the Semiconductor Products Group at Applied Materials, Dario Gil, Senior Vice President of IBM, and Max Mirgoli, Executive Vice President of Belgium's Imec.

The fact that leaders of the G7 summit host country personally met with top executives from the global semiconductor manufacturing industry is a rare occurrence in past G7 summits. This demonstrates the increasing awareness within the G7 of the importance of controlling critical and advanced semiconductor manufacturing capabilities and the urgency to increase semiconductor manufacturing capacity in regions facing less security threats.

Following the meeting, Minister of Economy, Trade, and Industry of Japan, Yasutoshi Nishimura, announced that Micron will propose investing up to JPY500 billion in mass-producing next-gen DRAM at the Hiroshima plant, with financial support from the Japanese government. Bloomberg reported that the Japanese government will provide approximately JPY200 billion in funds to support the plan.

Micron's expanded investment in the Hiroshima plant also marks the first introduction of ASML's EUV equipment technology, which is currently of great concern in the US-China geopolitical conflict, to Japan. Apart from upgrading Micron's Hiroshima plant to a globally significant hub, Bloomberg's analysis also highlights Japan's commitment to developing its domestic semiconductor industry, serving as a backup force for semiconductor production in Taiwan