Powerchip Semiconductor Manufacturing Corp. (PSMC), Taiwan’s third-largest contract chip manufacturer, is set to make significant inroads into the automotive semiconductor market in Japan. Chairman Frank Huang disclosed plans to invest $5.5 billion, alongside financial group SBI Holdings, in a joint venture to construct a plant in Miyagi, Japan, targeting a shift in focus from consumer electronics to automotive products.
The plant, expected to commence mass production of 12-inch wafers at a scale of 10,000 units per month in 2027, aims for 40,000 wafers a month by 2029. PSMC, already a major player in semiconductor production, seeks to capitalize on Japan’s automotive concentration and intends to increase automotive products’ contribution to its sales from the current 8% to an ambitious 30%.
The Japanese government is reportedly considering subsidies of up to $1.2 billion for the project, highlighting the strategic importance of semiconductor manufacturing in the region. PSMC’s foray into automotive chips will position it in direct competition with industry leaders like Taiwan Semiconductor Manufacturing Co. (TSMC) and United Microelectronics Corp. (UMC), both actively involved in Japan’s semiconductor landscape.
Despite the inherent challenges and competition, PSMC’s choice of Miyagi is strategic, leveraging the region’s semiconductor-related supply chains and existing infrastructure. The move not only positions PSMC to tap into Japan’s automotive sector but also aligns with the broader industry shift accelerated by the rise of electric vehicles. PSMC’s expansion plans underscore the changing dynamics in the semiconductor industry, emphasizing the growing demand for automotive chips and the need for manufacturers to adapt to emerging technologies.
