Japan has announced a major subsidy package of 536 billion yen (approximately $3.63 billion) to U.S.-based Micron Technology, aimed at accelerating research, development, and mass production of cutting-edge dynamic random-access memory (DRAM) chips at Micron's Hiroshima plant. This funding, revealed on September 12, 2025, is part of Japan's broader strategy to revitalize its semiconductor industry and secure supply chains for critical technologies like AI, cloud computing, and 5G.
This Micron deal signals continued momentum, especially amid U.S.-led efforts to diversify semiconductor production away from China. Following the announcement, Micron's stock surged, contributing to an 80% yearly gain and a 31% rise in the past month, reflecting investor optimism about long-term demand.
Analysts project Micron's free cash flow to climb from $1.44 billion in the latest twelve months to $8.09 billion by 2029, underscoring the potential upside from such partnerships.
Key Details of the Deal
- Funding Breakdown: The subsidies will cover R&D for next-generation DRAM and capital expenditures to expand production capabilities. Micron plans to begin shipping these advanced chips as early as 2028.
- Strategic Importance: DRAM is essential for data storage in high-performance applications. With global demand surging due to AI and data centers, this move helps Japan counter reliance on foreign suppliers and competes with leaders like South Korea's Samsung and SK Hynix.
- Micron's Role: The company already operates a significant facility in Hiroshima, where it kicked off mass production of high-bandwidth memory chips in 2022. This new investment builds on a 2023 commitment where Micron pledged up to $3.7 billion for extreme ultraviolet (EUV) technology in Japan, also with government support.
Broader Context
Japan's chip sector, once dominant in the 1980s with about 50% global market share, has shrunk to around 10%. To reverse this, Tokyo has invested heavily in recent years, including:- Billions for TSMC's Kumamoto plant.
- Support for Rapidus's 2nm chip project in Hokkaido.
This Micron deal signals continued momentum, especially amid U.S.-led efforts to diversify semiconductor production away from China. Following the announcement, Micron's stock surged, contributing to an 80% yearly gain and a 31% rise in the past month, reflecting investor optimism about long-term demand.
Analysts project Micron's free cash flow to climb from $1.44 billion in the latest twelve months to $8.09 billion by 2029, underscoring the potential upside from such partnerships.