Power Semiconductor Manufacturing Co. has pulled out of a joint venture with Japan’s SBI Holdings to build a 12-inch wafer fab, citing legal conflicts under Taiwan’s Securities Law. The exit comes as the project, originally aimed at producing automotive semiconductors by 2027, was dependent on a significant subsidy from Japan’s Ministry of Economy, Trade and Industry. Power Semiconductor’s withdrawal complicates the venture, which now leaves SBI to search for a new collaborator.
SBI had secured government support, including up to ¥140 billion (US$939 million) in subsidies, contingent upon ensuring the factory remains operational for at least 10 years. However, due to SBI’s limited experience in the semiconductor sector, Japan required Power Semiconductor to assume shared responsibility for the plant’s future operations. Power Semiconductor rejected the terms, arguing it conflicted with regulations requiring Taiwanese firms to have a controlling stake when involved in overseas operations.
While the semiconductor manufacturer described its role as purely advisory, involving technology transfer and consulting, it formally suspended its involvement earlier this year. This decision does not impact Power Semiconductor’s financial performance, but it leaves a major gap in Japan’s plans to boost local chip production.
