Japan Subsidizes Micron's $9.3 Billion Chip Factory in Hiroshima Amid Market Challenges

American semiconductor giant Micron Technology, headquartered in Idaho, laid the cornerstone for a new chip manufacturing plant in Hiroshima, Japan, last weekend. The facility represents a $9.3 billion investment, with production of advanced memory chips expected to begin in 2028. The project is partly subsidized by the Japanese Ministry of Economy, Trade and Industry, which is contributing approximately $3 billion, covering about one-third of the construction costs. This financial support allows Micron to accelerate development without straining its balance sheet.

Micron acquired the Hiroshima site in 2013 from the Japanese company Elpida Memory, which had declared bankruptcy. The subsidy is part of a broader $4.8 billion government support package for Micron, including research funding, aligned with Japan's recently unveiled national technology roadmap valued at around 100 trillion yen ($615 billion).

The timing of the factory announcement was overshadowed by a sharp decline in Micron's stock price, which fell significantly two days after the investment commitment, marking its steepest drop since the start of the AI-driven rally. Despite this, Micron's shares have surged 218% year-to-date, reaching about $1,000 per share.

Meanwhile, China's largest memory chip manufacturer, ChangXin Memory Technologies, is also preparing a major investment backed by government support. Industry analysts note that the memory chip market is entering a super-cycle phase, intensifying competition for investments among companies and countries. In a related development, Apple is lobbying the U.S. government to approve the use of DRAM chips from ChangXin amid a severe global memory chip shortage affecting the tech industry.