U.S. chip project significant for Japan-U.S. AI edge: Akazawa

Japanese Economy, Trade and Industry Minister Ryosei Akazawa has commended the U.S. semiconductor plant initiative chosen for the third phase of Japanese financing in the United States under their tariff pact. Speaking at a press briefing, Akazawa highlighted how the project "holds great significance for Japan and the United States to work together to secure a competitive advantage in the age of artificial intelligence."

The agreement, signed last year, committed Japan to providing $550 billion in investments and loans to the U.S. in return for tariff reductions on imports from Japan.

The project, spearheaded by U.S. semiconductor contract manufacturer GlobalFoundries, aims to build two new plants in New York with a funding cap of $21 billion. Japan will contribute financial support, loans, and loan guarantees through government-linked financial entities to construct the first facility, which requires approximately $10 billion in investment. The construction phase is expected to commence this year.

Akazawa emphasized that the project will bolster Japan's semiconductor manufacturing capacity, which is crucial for numerous sectors, including AI data centers. This enhancement will also bolster economic security in both nations. According to the Ministry of Economy, Trade, and Industry, two firms, Tokyo Electron and Tokyo Ohka Kogyo, are set to supply chip-manufacturing equipment and components/materials, respectively.

Renesas Electronics Corp. and two mid-sized companies are also part of the collaboration. Renesas intends to purchase products manufactured at the facilities.

Akazawa stressed that the advantages of the project will extend to small and mid-sized enterprises that contribute to the supply chain.