Taiwan's Powerchip chooses northern Japan for planned $5.4 billion fab

By Sam Nussey

TOKYO (Reuters) -Taiwanese chipmaker Powerchip Semiconductor Manufacturing Corp and Japanese financial firm SBI Holdings said on Tuesday they have selected Miyagi prefecture in northern Japan as the location for a planned $5.4 billion foundry.

While the project has yet to receive government subsidies, Reuters reported this month that talks were progressing in what would become the latest commitment by Taiwanese chipmakers to manufacturing in Japan.

Taiwan's TSMC has become increasingly positive about Japan as a base for production, Reuters reported last month, with construction of its new fab on track and the chipmaker seeing the local workforce as industrious.

"Japan has to have its own supply chain," Powerchip founder and Chairman Frank Huang told reporters.

"The cost structure (in Taiwan and Japan) is not too far from each other," he said.

Powerchip said it aimed to manufacture micro-controllers and power chips, which are needed for power management in electric vehicles, along with chips for artificial intelligence.

In the first $2.8 billion phase, planned for 2027, the foundry will manufacture chips using 40-nanometre and 55-nanometre technology with targeted monthly output of 10,000 wafers.

The second phase, planned for two years later, aims to introduce 28-nanometre technology with targeted monthly output of 40,000 wafers.

The foundry will be located at an industrial park that has abundant land, water and power neighbouring the major regional city of Sendai, the companies said.

They aim to cut costs by making reference to plans for a Powerchip fab being built in Taiwan, and discussions are already taking place with construction firms.

Powerchip and SBI announced its plan to build a fab in July and received proposals from more than 30 local governments from the northern island of Hokkaido to the major chipmaking centre of Kyushu, the two companies said.

Japan is seeing a flurry of investment in chipmaking as the government offers generous subsidies to companies such as homegrown foundry venture Rapidus and TSMC.

(Reporting by Sam Nussey; Editing by David Dolan and Jamie Freed)