Japan and the United States are discussing the construction of a semiconductor factory as part of investment talks valued at $550 billion, Nikkei reports.

The chip plant discussions sit inside a broader negotiation framework between the two governments. The $550 billion figure represents the total scale of investment under discussion, with the fab conversation forming one component rather than the headline item, according to the report.

The talks reflect Washington's continued push to deepen semiconductor cooperation with key allies. For Japan, a fab agreement tied to a larger investment package would mark another step in its effort to expand domestic chip manufacturing capacity and strengthen its position in the global supply chain.

Nikkei did not specify the prospective location of the factory, the process nodes it would target, or which companies would build and operate it. The report also did not break down how the $550 billion would be allocated across sectors, leaving the fab's share of the total undisclosed.

The negotiations are ongoing, and no final agreement has been confirmed. Any deal would require alignment on investment scale, technology scope, and the respective roles of government support and private capital from both countries.

A completed agreement would add to the growing list of Japan-linked semiconductor capacity projects and could reshape investment flows between the two allies, though the outcome and timing of the talks remain open questions.