Samsung Electronics, the world’s largest memory chip maker, has announced plans to build a new chip development facility in Yokohama, Japan, in a bid to boost its technological edge and foster cooperation with Japanese chip firms amid rising competition from China and Taiwan.

The South Korean tech giant will invest over JPY 300 billion (around $222 million) in the new facility, which will be located southwest of Tokyo, near its existing research institute. The facility will focus on the backend of chip production, which involves stacking multiple layers of wafers to increase performance and functionality. Samsung hopes to leverage Japan’s expertise and resources in chip materials and equipment to achieve a breakthrough in this field.

The new facility will employ several hundred workers and is expected to start operations in 2025. Samsung will also benefit from tax breaks and financial incentives worth JPY 10 billion (around $73.6 million) that the Japanese government is offering to attract foreign investment in the semiconductor sector.

The move comes as Japan and South Korea seek to strengthen their ties and collaboration in the chip industry, which is facing supply shortages and geopolitical tensions. Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk Yeol have met twice this year to discuss ways to enhance cooperation and innovation in the sector. They are also scheduled to meet again next week on the sidelines of the Group of Seven summit in Hiroshima, Japan.

Samsung’s main rival, Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, has also invested in Japan, setting up a JPY 280 billion (around $206 million) chip plant in Kumamoto Prefecture in 2021. Japan, which was once the global leader in the memory chip market, is trying to regain its position by attracting foreign players and supporting domestic firms. Besides TSMC, U.S.-based Micron Technology has also expanded its presence in Japan with tax incentives.

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