Pure play foundry Powerchip Semiconductor Manufacturing Corp. (PSMC) has signed an agreement with financial firm SBI Holdings to build a 12-inch wafer fab as Japan expands its semiconductor manufacturing prowess.
Under the deal, the two parties will establish a preparatory company where they will carry out the related fab planning and construction.
PSMC is the third largest foundry in Taiwan focused on memory and logic process capabilities. However, the company said in the future it will focus on artificial intelligence edge computing by developing 22/28 nm above process and wafer-on-wafer 3D stacking technology.
PSMC said in the agreement with SBI it will strengthen its relations with the Japanese industry, government and academic circles.
Why it matters
During COVID-19, the semiconductor manufacturing supply chain took a major hit due to the aggregation of the industry in Asia, specifically in Taiwan, Korea and China. This led to a chip shortage that lasted more than two years hitting every sector across the board with automotive getting hit the hardest.
Japan, much like other regions globally, is now looking to rebuild its semiconductor manufacturing prowess to not just compete with manufacturers in Asia but with the hope that if the supply chain is expanded beyond just a central location when another pandemic happens or a geopolitical event, the supply chain will be more resilient.
Because of this the Japanese government decided to invest in semiconductor manufacturing, setting aside billions in funding and incentives for companies looking to establish new chip fabs in the country.
Taiwan Semiconductor Manufacturing Co. (TSMC) is currently building a joint venture fab in the Kumamoto Prefecture of Japan with Sony Semiconductors and Denso Corp. called the Japan Advanced Semiconductor Manufacturing Inc. (JASM). The fab is receiving $3.5 billion in subsidies from the Japanese government as well as investments from Sony and Denso.
Sony is also looking to build a new chip fab in Kumamoto which will be worth several billions of dollars as well as Japanese government incentives.
