SBI Holdings announced on Wednesday that it would assist Taiwan's Powerchip Semiconductor Manufacturing Corp (PSMC) in establishing a factory in Japan as the country seeks to revitalise its chip industry.

According to SBI's CEO, Yoshitaka Kitao, the Japanese firm will establish a company to assist with planning and fundraising, including lobbying for government subsidies, and will assist the chipmaker in finding a location for a plant that would produce semiconductors for automakers and industrial machinery manufacturers.

PSMC will also build a research facility to develop more advanced chips, he said during a joint press conference with the Taiwanese firm. SBI's collaboration with PSMC comes as Japan offers billions of dollars in subsidies to foreign chip companies in order to entice them to develop or expand production in Japan.

Japan has already promised 400 billion yen ($2.8 billion) to help Taiwan Semiconductor Manufacturing Co (TSMC) , the world's leading maker of logic chips, build a plant in Kumamoto prefecture that will supply semiconductors to Sony Group and auto parts maker Denso Corp.

It has also offered subsidies to help memory chip makers Kioxia Corp and Western Digital Corp expand output at their plant in Japan, and has given money to U.S. chipmaker Micron Technology to add capacity at its plant in Hiroshima.

Japan is also funding a homegrown venture, Rapidus, which says it plans to produce advanced logic chips from the middle of the decade with help from IBM Corp.