The Japanese government has thrown out highly attractive investment conditions to South Korea's storage chip giants, but Samsung Electronics and SK Hynix have failed to make substantial investment decisions for years.
On February 24, according to Trend Force, despite the fact that the cost of building a factory in Japan may be only half that of South Korea and can receive comprehensive policy support, Samsung Electronics and SK Hynix remain cautious due to domestic public opinion pressure and constraints from stakeholders.
SK Hynix recently officially denied a report by Nikkei News about its plan to invest 2 trillion yen in building a storage chip factory in Japan. According to Chosun Biz, Samsung and SK Hynix have received multiple invitations from the Japanese government to build factories over the past few years, but the related proposals have always been on hold.
The report states that this cautious attitude sharply contrasts 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 factory and up to 500 billion yen in support for Micron's HBM chip factory in Hiroshima, highlighting its determination to revitalize the semiconductor industry.
Analysts believe that the hesitation of South Korean companies may affect their competitive position in the global semiconductor supply chain restructuring, especially in key areas like high-bandwidth memory, where competitors are accelerating capacity deployment through bases in Japan.
<h2>Cost Advantages Cannot Mask Political Concerns</h2>
According to Chosun Biz, citing executives from Samsung Electronics' semiconductor division, the initial investment and total ownership costs of building and operating a storage chip factory in Japan may be only about half that of South Korea.
<blockquote>
The Japanese government offers a &#34;full support package,&#34; including tax reductions, infrastructure assistance, labor support, and connections with local equipment suppliers. In contrast, domestic factories in South Korea have almost no substantial incentives and often incur additional costs.
</blockquote>
However, Chosun Biz points out that the main reason Samsung and SK Hynix have delayed building factories in Japan is due to domestic public opinion and pressure from government and local stakeholders.
Although from a cost and long-term growth perspective, a factory in Japan may be the safest choice, the impact of these external constraints seems to outweigh the financial advantages.
According to SeDaily and Chosun Biz, executives from both companies have conducted preliminary cost estimates for building semiconductor factories in Japan over the past few years, but discussions have never progressed to actual investment decisions or production line planning stages.
<h2>International Competitors Accelerate Layout in Japan</h2>
The report states that in contrast to the cautious attitude of South Korea's storage 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 factory, followed by additional support for the second phase of investment.
According to Yomiuri Shimbun, TSMC has finalized plans to mass-produce Japan's first 3-nanometer chips in Kumamoto, with a total investment expected to reach $17 billion (approximately 2.6 trillion yen).
Storage chip company Micron is also strengthening its layout in Japan. According to Nikkei News and Reuters, by the end of 2025, Micron will invest 1.5 trillion yen ($9.6 billion) to build a new HBM chip factory in Hiroshima
Construction will begin in May at the existing site, with shipments expected to start around 2028. The Japanese Ministry of Economy, Trade and Industry is providing up to 500 billion yen in support for the project.
Chosun Biz points out that the Japanese government continues to support the production base jointly operated by Western Digital and Kioxia.
In 2024, Western Digital announced that its capital investments in the 8th and 9th generation 3D flash memory at Kioxia's Yokkaichi (Mie Prefecture) and Kitakami (Iwate Prefecture) factories have been certified by the Japanese Ministry of Economy, Trade and Industry, qualifying for investment subsidies.
According to the official press release, the total support received by the two factories includes up to 150 billion yen, with an additional 92.9 billion yen provided under the specific semiconductor production facility development plan approved in July 2022

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According to reports, despite Japan offering generous conditions of "halving factory costs and providing full subsidies," Samsung and SK Hynix remain cautious about investing in Japan due to domestic public opinion and political pressure in South Korea. This stands in stark contrast to TSMC and Micron, which have received substantial subsidies and are accelerating their expansion in Japan

- The Japanese government has offered attractive investment conditions for semiconductor manufacturing, but Samsung Electronics and SK Hynix remain hesitant to commit despite lower costs and comprehensive support.  
- This reluctance is attributed to domestic public opinion and pressure from stakeholders, contrasting with the rapid expansion of competitors like TSMC and Micron in Japan, who are receiving substantial government subsidies.  
- Analysts warn that this cautious approach may undermine the competitive position of Korean firms in the global semiconductor supply chain, particularly in critical areas like high-bandwidth memory.

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