U.S. chip project significant for Japan-U.S. AI edge: Akazawa

The project "holds great significance for Japan and the United States to work together to secure a competitive advantage in the age of artificial intelligence," Akazawa told a press conference.

In the agreement concluded last year, Japan pledged to provide the United States with 550 billion dollars in investment and loans in exchange for U.S. tariff cuts for imports from the Asian country.

Under the project, led by U.S. semiconductor contract manufacturer GlobalFoundries Inc., two new plants are set to be built in the state of New York with funding of up to 21 billion dollars.

Japan will provide investment, loans and loan guarantees through government-affiliated financial institutions for the construction of the first plant, which involves some 10 billion dollars in investment. The construction work is slated to begin this year.

"The project will strengthen the capability to manufacture semiconductors, essential in various areas including AI data centers," Akazawa said, adding that it will also enhance economic security in both countries.

According to the Ministry of Economy, Trade and Industry, two companies including Tokyo Electron Ltd. are expected to supply chip-manufacturing equipment, while Tokyo Ohka Kogyo Co. will provide components and materials.

Japan's Renesas Electronics Corp. and two midsize companies will also participate. Renesas plans to buy products made at the plants.

"The benefits (of the project) are expected to also reach small and midsize companies that support the supply chain," Akazawa said.