Powerchip Semiconductor Manufacturing Corp (力積電) has reached an agreement with SBI Holdings Inc to jointly build a 12-inch fab in Japan to make chips for vehicles and artificial intelligence (AI) applications, the companies announced yesterday.
Powerchip is Taiwan’s third-largest contract chipmaker, after Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電). SBI is a Japanese financial services provider based in Tokyo.
Under the agreement, Powerchip and SBI will initially establish a preparatory company to select a site for the planned factory, formulate business plans and establish their funding strategies.
Photo courtesy of Powerchip Semiconductor Manufacturing Corp
In a statement, Powerchip said the fab would make chips using legacy process technologies such as 22-nanometer or 28-nanometer, as well as more mature technologies.
“Our priority is Japan,” Powerchip chairman Frank Huang (黃崇仁) said, after signing the agreement with SBI chief executive officer Yoshitaka Kitao in Tokyo.
A weakening yen, lower labor costs and favorable financing now make Japan attractive as a production site, Huang said.
SBI said the new fab would aim to enhance semiconductor supply chain resilience in Japan as the issue of procuring sufficient chips — used in AI, automotive and other devices — has become critical amid heightened geopolitical risks.
“Powerchip will contribute to the stable supply of semiconductors in Japan and around the world by leveraging its expertise,” SBI said in a separate statement.
Details regarding the start of construction and operation of the plant will be announced when they become more clear, the companies said.
The partnership comes as Japan pledges to revive its semiconductor industry, after Tokyo launched its “Strategy for Semiconductors and the Digital Industry” in June 2021, SBI said.
“Partnering with Taiwan’s leading semiconductor company will be a major key to success,” SBI said.
While Japan is preparing billions of dollars in subsidies as part of a push to triple domestic chip production by 2030, such efforts are not enough, Kitao said.
“The government has spent ￥2 trillion (US$13.9 billion) over the past two years to develop domestic chip manufacturing capacity, but I think that’s too little,” Kitao said.
“We want to help revive Japan’s chip industry.” he said.
In the 1990s, Japan boasted a 50 percent share of the global semiconductor market, but its share in the global market has now dropped to less than 10 percent, SBI said. The global semiconductor market is expected to reach ￥100 trillion by 2030, the company said.
Additional reporting by Bloomberg
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