Japan offers "half-price factory construction + full subsidies," but Samsung and SK Hynix remain cautious about investing in Japan

The Japanese government has offered highly attractive investment conditions to South Korea’s memory chip giants, but Samsung Electronics and SK Hynix have remained hesitant for years without making substantial investment decisions.

On February 24, according to TrendForce, despite the fact that building factories in Japan could cost only about half as much as in South Korea and full policy support is available, Samsung Electronics and SK Hynix continue to hold back due to domestic public opinion pressure and stakeholder constraints.

SK Hynix recently officially denied the Nikkei News report about its plan to invest 2 trillion yen in Japan to build a memory chip factory. According to Chosun Biz, Samsung and SK Hynix have received multiple factory-building invitations from the Japanese government over the past few years, but these proposals have remained on hold.

The report notes that this cautious attitude contrasts sharply with the rapid expansion of chip manufacturers like TSMC and Micron in Japan. The Japanese government has provided up to 476 billion yen in subsidies to TSMC’s Kumamoto plant and up to 500 billion yen to Micron’s Hiroshima HBM chip factory, demonstrating its determination to revitalize the semiconductor industry.

Analysts believe that Korea companies’ hesitation could impact their competitive position in the global semiconductor supply chain restructuring, especially in critical areas like high-bandwidth memory, where competitors are accelerating capacity deployment through Japanese bases.

Cost advantages cannot hide political concerns

According to Chosun Biz, citing a senior executive from Samsung Electronics’ semiconductor division, the initial investment and total ownership costs for building and operating memory chip factories in Japan could be about half of those in South Korea.

The Japanese government offers a “full support package,” including tax incentives, infrastructure assistance, labor support, and connections with local equipment suppliers. In contrast, domestic Korean factories have few substantial incentives and often incur additional costs.

However, Chosun Biz points out that the main reasons Samsung and SK Hynix delay building factories in Japan are domestic public opinion and pressure from government and local stakeholders.

While from a cost and long-term growth perspective, Japanese factories might be the safest choice, these external constraints seem to outweigh the financial advantages.

According to SeDaily and Chosun Biz, executives from both companies have conducted preliminary cost assessments of building semiconductor factories in Japan over the past few years, but discussions have never advanced to actual investment decisions or production line planning.

International competitors accelerate their layout in Japan

In contrast to the cautious stance of Korean memory chip giants, TSMC and Micron are rapidly expanding in Japan.

According to Chosun Biz, Japan’s Ministry of Economy, Trade and Industry has provided up to 476 billion yen in subsidies to TSMC’s Japanese subsidiary JASM’s Kumamoto plant, and subsequently added support for its second-phase investment.

Yomiuri Shimbun reports that TSMC has finalized plans to mass-produce Japan’s first 3nm chips in Kumamoto, with a total investment expected to reach $17 billion (about 2.6 trillion yen).

Memory chip company Micron is also strengthening its presence in Japan. According to Nikkei and Reuters, by the end of 2025, Micron will invest 1.5 trillion yen (about $9.6 billion) to build a new HBM chip factory in Hiroshima.

Construction is scheduled to begin in May at the existing site, with shipments expected around 2028. The Japanese Ministry of Economy, Trade and Industry is providing up to 500 billion yen in support for this project.

Chosun Biz notes that the Japanese government continues to support the joint operations of Western Digital and Kioxia’s manufacturing bases.

In 2024, Western Digital announced that its eighth and ninth generation 3D NAND investments at Kioxia’s Yokkaichi (Mie Prefecture) and Kitakami (Iwate Prefecture) factories received certification from Japan’s Ministry of Economy, Trade and Industry, qualifying for investment subsidies.

According to official press releases, the total support for these two factories includes up to 150 billion yen, along with an additional 92.9 billion yen provided under a specific semiconductor manufacturing facility development plan approved in July 2022.

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