South Korea’s Samsung is considering setting up a chip test line in Japan, five people said, to bolster its advanced packaging business and forge closer ties with Japanese makers of semiconductor equipment and materials.

It would be the first such test line for Samsung, the world’s largest maker of memory chips, in Japan. It would also come as the United States increasingly urges allies to work together to counter China’s rising might in chips and advanced technology.

Japan on Friday said it will restrict exports of 23 types of chip-making tools, aligning its technology trade controls with a US push to curb China’s ability to make advanced chips.

Samsung is looking at establishing the facility in Kanagawa prefecture, next to Tokyo, where it already has a research and development (R&D) centre, according to four of the people, all of whom declined to be identified because the information isn’t public.

Although the details have not yet been finalised, including the timing, the investment would likely be $75 million (roughly Rs. 615 crore), one of the people said.

Samsung is looking to deepen cooperation with Japanese companies, two of the people said. Japan is attractive because of relatively low labour costs and the presence of leading chip equipment and materials makers, allowing Samsung access to a local “ecosystem”, one of them said.

However, one of the people said deliberations were still in an early stage, adding the South Korean company was considering various options and nothing has been decided.

© Thomson Reuters 2023