The United States and Japan are becoming the next important manufacturing hubs for Samsung Electronics and SK hynix, as the companies speed up capacity growth to satisfy rising demand for artificial intelligence (AI) chips.
Both nations provide benefits, with the U.S. enabling closer access to key clients like Nvidia and Tesla, along with incentives that may aid in lowering investment expenses and could lessen exposure to semiconductor tariffs from the Trump administration.
Japan boasts a robust ecosystem of suppliers for chip equipment and materials, dependable power and water resources in certain areas, and significant government support for semiconductor investments.
For semiconductor manufacturers, selecting a location involves more than just being close to customers; dependable access to electricity and water, along with government incentives, is becoming crucial as firms invest billions in new fabrication plants.
Firms carefully examine incentives, such as infrastructure and subsidies. They must initially evaluate if water and electricity can be provided readily, according to reports.
SK hynix has recently taken a notable interest in Japan as a possible manufacturing hub.
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The nation hosts significant suppliers of semiconductor equipment and materials, including Tokyo Electron. TSMC, the producer of the base die for SK hynix’s high-bandwidth memory 4 (HBM4), has fabs in Kumamoto, while Micron manufactures DRAM in Hiroshima.
The Japanese government has provided significant financial assistance to draw in chip investments. It aims to offer up to 1.2 trillion yen ($7.73 billion) in subsidies for TSMC’s initial two Kumamoto fabs and up to 500 billion yen for Micron’s growth in Hiroshima.
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SK Group Chairman Chey Tae-won expressed an increasing interest in Japan as well. In a recent interview with Japan’s Asahi Shimbun, Chey stated that collaborating with Kioxia on joint production was “one option” and mentioned that the two companies could also work together on research and development, supply-chain sharing, and possibly constructing a factory collaboratively.