ISTANBUL

The Japanese government announced on Friday that it would allocate 476 billion yen (approximately $3.55 billion) for the ongoing construction of a semiconductor facility in the country's southwest, local media said.

According to a report by the Kyodo news agency, Japan aims to boost chip supply capacity by funding a factory run by a subsidiary of the Taiwan Semiconductor Manufacturing Co. (TSMC) amid a global semiconductor shortage.

Japan Advanced Semiconductor Manufacturing, a joint venture of TSMC, Sony Semiconductor Solutions Corp., and automotive manufacturer Denso Corp., will open the facility in the Kumamoto Prefecture, said Koichi Hagiuda, the country's industry minister.

"We are hoping that it will continuously contribute to the development of the semiconductor industry for the future, in addition to resilience of the semiconductor supply chain in our country," Hagiuda said in a press conference.

The three partners of the subsidiary will invest $8.6 billion in the factory, including the government's support, with plans to begin production by the end of 2024.