The $5.4 billion foundry that Powerchip Semiconductor Manufacturing Corp. (6770. TW) of Taiwan and SBI Holdings (8473.T), a Japanese banking company, said on Tuesday that they had chosen Miyagi Prefecture in northern Japan as the site.
Although government subsidies for the project are still pending, Reuters revealed last month that negotiations were moving along for Taiwanese chipmakers to make their next commitment to manufacturing in Japan.
According to a Reuters story published last month, Taiwan’s TSMC (2330. TW) has grown more optimistic about Japan as a production site due to the chipmaker’s perception of the country’s hardworking workforce and the progress made on building its new factory.
Frank Huang, the founder and chairman of Powerchip, told reporters that “Japan has to have its own supply chain.”
“The cost structure (in Taiwan and Japan) is not too far from each other,” he stated. Powerchip stated that its goal was to provide artificial intelligence chips as well as microcontrollers and power chips, which are required for electric car power management.
The foundry will use 40-nanometer and 55-nanometer technologies to produce chips in the first $2.8 billion phase, scheduled for 2027, with a monthly goal production of 10,000 wafers.
Two years later, the second phase will introduce 28-nanometer technology with a monthly goal production of 40,000 wafers.
According to the corporations, the foundry will be in an industrial park near Sendai, a significant regional metropolis with enough space, water, and electricity.
They relate to plans for a power chip factory being built in Taiwan to save costs, and talks have already begun with construction companies.
Following their intention to construct a fabrication facility in July, Powerchip and SBI said that they had received bids from over thirty local governments, ranging from the central chipmaking hub of Kyushu to the northern island of Hokkaido.
Japan is witnessing a surge in investment in the chip industry due to the government providing substantial subsidies to businesses like TSMC and Rapidus, which are domestic foundry ventures.
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