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Powerchip Semiconductor to Establish Chip Factory in Japan for Enhanced Supply Chain Stability

Taiwan's Powerchip Semiconductor is set to construct a chip facility in Miyagi Prefecture, bolstering chip supplies across industries, particularly in automobiles
p 6770.TW s 8473.TSE Mid and Small Cap 2000 Tech 350 Semicon 75
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Taiwan’s Powerchip Semiconductor (PSMC) will build a factory in Miyagi Prefecture in northern Japan. The new factory will begin operations as early as 2026, providing a more stable supply of chips used in various industries, including automobiles.

Powerchip and Japanese investment company SBI Holdings announced in July this year that they would jointly build a chip factory in Japan and are looking for a site. The two parties will sign an agreement at the end of this month.

Powerchip and SBI will establish a joint venture in Japan to operate the factory. SBI will consider financing the new company together with affiliate SBI Shinsei Bank and regional partner banks.

Powerchip will provide technical and human resources. The new plant will produce arithmetic processing semiconductors with circuit line widths of 55 to 28 nanometers for the automotive and IT industries. The monthly production capacity target is 10,000 12-inch diameter silicon wafers.

The two parties have invested approximately 400 billion yen (NT$86.3 billion) in the first phase of the factory, and Japan’s Ministry of Economy, Trade and Industry will provide subsidies for the project. Miyagi Prefecture already has a high concentration of automotive industry plants and good related logistics. Candidate sites also include an industrial park near Sendai, the prefecture’s largest city.

Powerchip plans to build several factories. Construction of the first phase could begin as early as 2024. The timing and plans for Phase 2 will be determined at a later date. The total investment is expected to be approximately 800 billion yen (NT$172.7 billion).

Japan’s Ministry of Economy, Trade and Industry is seeking to add approximately 3.4 trillion yen (NT$734 billion) to the semiconductor fund in its proposed supplementary budget for fiscal year 2023, and plans to allocate up to 140 billion yen (NT$30.2 billion) to Powerchip in the first phase. The Department concluded that strengthening the semiconductor production base used by a wide range of industries is important to the country’s economic security.

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