Japan will provide a subsidy up to 92.9 billion yen ($680 million) to Kioxia Corp. and Western Digital Corp. for a semiconductor production facility as part of efforts to secure stable domestic chip production, the industry minister said Tuesday.

Economy, Trade and Industry Minister Koichi Hagiuda said the government had approved the capital investment plan to enhance the capacity of the facility, which is a joint venture by Kioxia with the U.S. chip giant.

"The plan will contribute to developing a resilient chip supply chain, making progress in the semiconductor industry as well as strengthening Japan-U.S. cooperation," Hagiuda said, referring to the facility in Yokkaichi, Mie Prefecture.

The development of a resilient supply chain for semiconductors is likely to be on the agenda when Hagiuda visits the United States and holds the first economic "two-plus-two" dialogue involving foreign and industry ministers of the two countries on Friday in Washington.

"We appreciate the support of the Japanese government and will continue to produce cutting-edge flash memory which is indispensable for a digital society where cloud services, 5G communications, IoT, AI and automated driving are expanding," said Nobuo Hayasaka, president of Kioxia, formerly known as Toshiba Memory Corp.

With the subsidy, Kioxia and Western Digital said they will continue to accelerate the development and production of cutting-edge flash memory at the Yokkaichi plant as well as contribute to fostering chip-related industries and talent.

The joint venture manufacturing facility will produce 3D flash memory including 112- and 162-layer as well as future nodes, with the initial production output eyed this fall.

In June, the government announced its decision to provide up to 476 billion yen in subsidy for a Taiwan Semiconductor Manufacturing Co. subsidiary for the ongoing construction of a plant in Kumamoto Prefecture, southwestern Japan.

The plant, a joint venture of TSMC, Sony Semiconductor Solutions Corp. and Denso Corp., will produce chips mainly for Japanese clients.

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