(Reuters) -Prime Minister Fumio Kishida said he welcomed and expected more investment from global chipmakers in Japan, which is striving to revive its chip sector, after meeting top executives on Thursday before a Group of Seven summit.
China is set to be high on the agenda of the annual G7 leaders meeting that begins on Friday, with the United States increasingly urging its allies to counter the Asian giant's chip and advanced technology development.
Growing Taiwan and U.S. tensions with China have brought serious challenges to the semiconductor industry, with Taiwan a major producer of chips used in everything from cars and smartphones to fighter jets.
Kishida told the executives, including those from Micron Technology Inc (NASDAQ:MU), Intel Corp (NASDAQ:INTC) and Taiwan Semiconductor Manufacturing Co (TSMC), that stabilising supply chains would be a topic of discussion at the G7 talks in the western city of Hiroshima.
"I am very pleased with your positive attitude towards investment in Japan, and would like the government as a whole to work on further expanding direct investment in Japan and support the semiconductor industry," Kishida said.
An industry ministry official later said Kishida wanted to foster cooperation to strengthen semiconductor supply chains, while Industry Minister Yasutoshi Nishimura said Japan would use 1.3 trillion yen ($9.63 billion) of the supplementary budget from the last fiscal year to support its chip business.
In particular, Kumamoto prefecture in southwestern Japan is quickly becoming a hotbed for tech investment from companies including TSMC and Fujifilm Holdings Corp.
Micron said in a statement that it would bring extreme ultraviolet (EUV) technology to Japan, becoming the first semiconductor company to do so, and expected to invest up to 500 billion yen with support from the Japanese government.
Bloomberg News reported the financial incentives would total about 200 billion yen.
An industry ministry official said no decision had been made on whether Japan would give a subsidy to Micron, but that one would be made as soon as possible.
The G7 summit runs from Friday to Sunday, and Kishida is set to meet with U.S. President Joe Biden later on Thursday. Public support for Kishida has been on the upswing in the run-up to the summit, with a Jiji poll on Thursday showing approval for his cabinet exceeded disapproval for the first time in nine months.