Taiwan's Powerchip Semiconductor Manufacturing Corp. and investment firm SBI Holdings Inc. have announced a partnership to build a new foundry in Japan. The purpose of this venture is to meet the increasing demand from manufacturers to source chips locally. SBI will assist in raising funds for the project, which will initially focus on producing 40-nanometer and 55nm automotive and industrial chips. However, there are plans to eventually produce more advanced 28nm chips in the medium-to-long term.
The specific details regarding the timing and location of the factory are yet to be determined, as stated by SBI President Yoshitaka Kitao during a news conference. Taiwan Semiconductor Manufacturing Co., the world's leading contract chipmaker, is also in the process of building a plant in southwest Japan, which is expected to go online next year. Kitao emphasized the importance of how Powerchip and SBI will recover their investment in this new venture.
SBI, based in Tokyo, recognizes the growing need for financing in the chip manufacturing industry, particularly for the creation of redundant production lines. Manufacturers are facing increased pressure, both politically and from investors, to diversify their suppliers. In order to meet these financing needs, SBI will support the chip venture in raising funds globally. They are considering various measures, including the issuance of municipal bonds and securing loans from Japanese regional banks.
Powerchip Chairman Frank Huang stated that their primary focus will be on Japan. The weakened yen, lower labor costs, and favorable financing options make Japan an attractive location for chip production. Prime Minister Fumio Kishida is hopeful that Japan can regain its leadership in the semiconductor industry by capitalizing on shifting geopolitical priorities. The government is already prepared to provide billions of dollars in subsidies to triple domestic chip production by 2030. However, Kitao believes that more needs to be done to revive Japan's chip industry and help it regain its former prominence.