The Japanese government was tipped to offer overseas chipmakers financial incentives over several years to work with domestic companies on advanced semiconductor manufacturing facilities to revitalise the country’s chip industry, The Yomiuri Shimbun reported.

It wrote the government sees cooperation with a global chipmaker as the best route to accelerating a path to advanced chip manufacturing and is working out the details of the incentives, with the joint development partner eligible to receive hundreds of billions of yen or several billion dollars.

Japan, which shifted much of its high-tech manufacturing overseas, aims to boost domestic chip production with a tie-up with a global company.

Taiwan Semiconductor Manufacturing (TSMC) was cited as a prime target.

In November 2019, the chipmaker established a joint research institute for chip development with the University of Tokyo, The Yomiuri Shimbun said.

The Taiwan-headquartered company announced in May plans to build a $12 billion semiconductor factory in the US and is looking to shift some of its manufacturing capabilities out of China, as a US-China trade war threatens to disrupt its supply chain, which is heavily reliant on the mainland.