Japan Invests $680 Million in Kioxia and Western Digital to boost Domestic Semiconductor Production

Kioxia and Western Digital announced that the Japanese government would provide a subsidy of up to 92.9 billion ($680 million) for their joint venture's Fab 7 3D NAND fabrication facility…

By Nivedita Bangari

July 27, 2022

2 min read

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Kioxia and Western Digital announced that the Japanese government would provide a subsidy of up to 92.9 billion ($680 million) for their joint venture’s Fab 7 3D NAND fabrication facility at YokkaichiOperations in Japan. The government programme that includes the subsidy was specifically created to support Japan’s semiconductor manufacturing sector.

In late 2020, Kioxia began construction on its Fab 7 facility at Yokkaichi Operations. The fab shell’s construction is yet unfinished. Beginning this fall, Kioxia and its partner Western Digital will begin producing 112-layer and 162-layer 3D NAND memory at the fab. The fab will eventually create 3D flash memory with even more layers.

Even though 3D NAND and DRAM memories are essential for PCs, servers, smartphones, and practically all other sorts of sophisticated gadgets we use today, manufacturing both of them is risky because these are commodity chips. They are fully subject to market forces like supply and demand. Governments have been hesitant to subsidise DRAM and NAND makers as a result, allowing businesses like Micron and SK Hynix to acquire less successful DRAM and NAND producers in recent years.

However, it appears that the Japanese government is consciously shifting its position on the manufacturing of 3D NAND. Manufacturing 3D NAND may not be the most lucrative industry in the world and is vulnerable to cyclical downturns.

Huge 3D NAND manufacturers like Kioxia and Western Digital contribute to the growth of the regional semiconductor production business.

Once the supply chain for semiconductors is established in the nation, you can entice manufacturers of other chips, particularly contract manufacturers of logic chips like TSMC who prefer to build new fabs in regions with existing supply chains and skilled labour.

Credit: toms hardware

“We appreciate the support of the Japanese government and will continue to produce cutting-edge flash memory which is indispensable for a digital society where cloud services, 5G communications, IoT, AI and automated driving are expanding,” said Nobuo Hayasaka, President and CEO of Kioxia. “We are committed to further advancing the semiconductor industry and contributing to the development of the domestic and global economies.”