TECH

Japan's government may not have the money to partner TSMC with chip manufacturing

TSMC's first venture in Japan will require an investment of $7 billion, and the Taiwanese partner is counting on Sony's help in that regard, which will become the main customer for the new production site. Japanese authorities would also like to allocate a certain amount as subsidies, but for a variety of reasons this will be problematic.

First, as TSMC representatives emphasized, the company will avoid partnering with government agencies during the construction of its overseas facilities. Second, in Japan the legislative framework is not ready yet, which would guarantee the protection of the State's interests in the implementation of subsidized projects. They want to demand from TSMC a willingness to increase production volumes in the face of component shortages, and this implies significant capital investments from the company.

As Business Korea notes with reference to Japanese media, several projects involving government grants have already failed in Japan, as local authorities do not always fulfill their obligations to fully finance the facilities. In the case of the TSMC project, experts are confused by the unprecedented amount of subsidies (up to $3.5 billion) and the difficulties in justifying such budget expenditures. WTO rules can also become an obstacle to this type of subsidy, as they create not entirely fair conditions for competition among chipmakers.

AVnews