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Japan funds $338 million TSMC chip development project

The country is hoping to increase investment in semiconductor research to combat the ongoing global shortage

Japan has approved a $338 million (£238 million) semiconductor research project that will see Taiwan Semiconductor Manufacturing Company (TSMC) develop new chip technology in the country, amid an ongoing global shortage.

Over 20 Japanese companies are set to take part in the project worth 37 billion yen ($338 million), of which the Japanese government will pay half, according to the AFP.

The research will focus on tech for 3D chip assembly, to allow the creation of components that are more dense but still small, with the intention of boosting Japan's competitiveness in this key sector.

Construction of a trial facility will begin this summer at the National Institute of Advanced Industrial Science and Technology in the city of Tsukuba, about 60km northeast of Tokyo, with a launch date expected in 2022.

Last month, TSMC, the world's largest contract chipmaker, was reportedly making plans to build five more chip plants in Arizona. As the company makes most of its chips in Taiwan, the project in Arizona would represent a major expansion of TSMC's plans to shift its manufacturing to the US.

Discussions around building a TSMC semiconductor plant in Europe reportedly collapsed last month. There had been talks about opening a factory in the region to remedy the impact of the global semiconductor shortage on the continent, with the EU seeking to increase its share of global semiconductor production from 9% to 20% by 2030. The collapse in the talks has meant the chip company switched its attention to markets in North America.

Cisco CEO Chuck Robbins said in April the global semiconductor shortage might last for another six months, although the crisis is unlikely to be resolved until 2022. However, Dell founder and CEO Michael Dell said in May that he expects the chip crisis "will probably continue for a few years".

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