Taiwanese chip company invests $5.3 billion in Japanese factory to boost semiconductor production

ByYasmeeta Oon

Nov 2, 2023

Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) and the Japanese financial conglomerate SBI Holdings have designated a location in northern Japan for the establishment of an 800 billion yen ($5.3 billion) chip manufacturing facility, as announced by the two companies on Tuesday.

The initial phase of the project, located in Miyagi Prefecture to the north of Tokyo, necessitates a 420 billion yen investment. PSMC and SBI Holdings will shoulder half of the foundry’s expenses, with the remainder funded by both domestic and international investors, bank loans, and government subsidies, according to the companies.

Japan has been actively seeking to bolster its domestic semiconductor industry and chip production, and the extensive plant exemplifies the government’s commitment to this objective. This move is particularly pertinent as the United States continues to tighten export restrictions on essential semiconductors and equipment to China while concurrently striving to boost domestic chip manufacturing for various applications, including smartphones and automobiles.

Given the increasing demand for semiconductors and their growing strategic significance, numerous countries, Japan included, are endeavoring to enhance their overall capabilities in this realm.

The PSMC and SBI factory will focus on manufacturing semiconductors in the 28 nanometer, 40 nanometer, and 55 nanometer categories, which, while not cutting-edge chips for smartphones, are pivotal for automotive applications. Japan is home to some of the world’s most prominent automakers, such as Toyota and Honda.

Although specific details regarding the construction timeline and the operational commencement of the factory have not been disclosed, the companies have assured that more concrete information will be provided in due course.

Japan has been offering incentives and subsidies to encourage companies to establish manufacturing facilities within the country, and this effort has attracted investment from prominent players in the semiconductor industry, such as U.S. memory chipmaker Micron, which pledged to invest up to 500 billion yen in Japan over the coming years.

Simultaneously, Japan has been keen to reinforce its presence in areas of the semiconductor supply chain where it has historically excelled. In June, a fund supported by the Japanese government proposed a 903.9 billion yen acquisition of the semiconductor materials giant JSR.

Yasmeeta Oon

Just a girl trying to break into the world of journalism, constantly on the hunt for the next big story to share.