In August, 2023, PSMC announced its partnership with Japan’s SBI to construct a chipmaking plant in Japan. However, the plan has been halted last Friday, with reports indicating that PSMC’s deteriorating financial performance may be the reason. However, the Taiwan chipmaker refuted the speculation, claiming the termination of the fab is not related to its financial status, according to a report by CNA.

PSMC (Powerchip Semiconductor Manufacturing Corp) explained that its collaboration with SBI follows the Fab IP model, in which the former provides consulting for the factory establishment, personnel training, and technology transfer, charging service fees and royalties to its Japanese partner, the report noted. Therefore, Powerchip has no plans to invest in or lead the operations of the new factory.

Citing the remarks by PSMC, the report notes that the company’s board has confirmed the halt of the collaboration plan, and has sent personnel to the Ministry of Economy, Trade and Industry (METI) in Japan to explain the situation, while notifying SBI Holdings in the meantime.

According to a previous report by Nikkei, PSMC informed SBI Holdings last Friday that it was not willing to assume the risks linked to the project. As a result, the two companies will dissolve their partnership aimed at constructing the facility in Miyagi Prefecture in northeastern Japan. However, SBI stated that it plans to carry out the project by finding new partners.

The factory is originally expected to begin mass production by 2027, focusing on automotive semiconductors, with the total planned investment amounting to ¥800 billion, according to Nikkei.

Nikkei notes that PSMC has been struggling with mature nodes due to the oversupply from Chinese firms, resulting in operating losses for five consecutive quarters from April to June 2024.

It is interesting to note that this decision comes after PSMC’s announcement on Thursday that it will provide technology for a chip plant to be built in India by Tata Group, one of the country’s largest conglomerates.

The company announced on the 26th that it has signed a definitive agreement with Tata Electronics in New Delhi to collaborate on building India’s first 12-inch wafer fab in Dholera, Gujarat. PSMC will transfer mature process technologies and train local employees as part of the partnership.

According to PSMC, the USD 11 billion facility, with a monthly capacity of 50,000 wafers, is expected to create over 20,000 high-tech jobs in the region.

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(Photo credit: PSMC)

Powerchip Semiconductor Manufacturing (PSMC), SBI Holdings, Inc., Japan’s Miyagi Prefecture and JSMC signed the Memorandum of Understanding on the 31st, confirming that JSMC’s first fab will be selected in Japan. The Second Northern Sendai Central Industrial Park in Ohira Village, Kurokawa District, Miyagi Prefecture (Second Northern Sendai Central Industrial Park) is the planned site.

It is understood that in August this year, PSMC and SBI jointly established JSMC and began preparations for setting up a wafer fab in Japan. After extensive discussions with the municipal government of the candidate locations and multiple on-site inspections, a number of factors were taken into consideration, including: the robustness of infrastructure such as water supply, drainage, high-voltage power supply, and logistics capabilities, as well as the park’s ability to withstand natural disasters, and surrounding life.

PSMC states that the quality of the environment and the potential for future industry-university cooperation ultimately led to the selection of the Second Northern Sendai Central Industrial Park as the site.

PSMC said that SBI is committed to working closely with the Japanese government, Miyagi Prefecture, partners and relevant financial institutions to discuss various details of investment in Japan. More information will be announced after the details are finalized.

(Image: PSMC)