Japanese Newspapers Skeptical about Tokyo Government Subsidies for TSMC

The Japanese government is planning to provide huge subsidies for TSMC with the largest foundry in the world increasing its investment in Japan. An increasing number of Japanese news outlets are skeptical about the wisdom of the Japanese government's policy.

TSMC is planning to build a semiconductor plant in Kumamoto at an investment of 800 billion yen and about half of the investment is expected to be subsidies from the Japanese government. The Asahi Shimbun said on Nov. 13 that multiple government-led industrial projects have failed and the subsidies for TSMC are unprecedentedly large, adding that the government needs to explain about the purpose and effect of the subsidies and reconsider its decision if necessary.

“The chips to be produced at the plant are not the most advanced type and the production is unlikely to make any contribution to Japan’s semiconductor equipment and material industries,” it mentioned, adding, “Besides, the subsidies may constitute a violation of WTO rules against subsidies that may cause trade distortion.”

Likewise, Kyodo News reported that the Japanese government has yet to give reasons for such generosity. The Nikkei also reported that the Japanese government may regret the decision in the event of an oversupply in the semiconductor industry and a sudden decline in international price.