Taiwan's Powerchip considering 5 sites in Japan for $5.4 bln factory - sources

Powerchip Semiconductor Manufacturing

17/10/2023 09:20

By Fanny Potkin, Sam Nussey and Miho Uranaka
       SINGAPORE/TOKYO, Oct 17 (Reuters) - Taiwan chipmaker
Powerchip Semiconductor Manufacturing Corp  6770.TW  is
considering around five sites in Japan, including Mie
prefecture, for setting up a potential $5.4 billion factory as
talks on subsidies progress, sources said.  
    Powerchip announced in July it was setting up a joint
venture with Japanese financial firm SBI Holdings  8473.T  with
the aim of securing government subsidies to build a plant in
Japan. 
    Those talks are progressing, according to two sources, who
declined to be named as the information is not public.  
    The total cost of the factory is expected to be around 800
billion yen ($5.35 billion), one source said, with Powerchip
negotiating for subsidies to cover part of the cost of the first
phase. 
    Powerchip is looking at around five sites for the factory,
the source said. One option is Mie prefecture in central Japan,
two sources said, close to the industrial hub of Nagoya and fabs
operated by Taiwan's UMC  2303.TW  and Japan's Kioxia.
    Powerchip did not respond to requests for comment.
    An SBI spokesperson said negotiations with the Japanese
government are ongoing and there is a plan to formally apply for
subsidies for the 420 billion yen first phase.  
    Japan is seeking to rejuvenate its chip industry, which
retains an edge in materials and equipment but has lost its
dominance in manufacturing, with subsidies for domestic and
foreign chipmakers.   
    A factory from Powerchip would mark a further commitment by 
Taiwanese chipmakers into manufacturing in Japan, with TSMC
 2330.TW  building a factory in Kyushu in western Japan and
eyeing a second. 
   TSMC, the world's leading contract chipmaker, has become
increasingly positive about Japan as a base for production,
seeing its workforce as industrious, and government as easy to
deal with, Reuters reported previously. 
    Powerchip sees scope for additional foundry capacity in
Japan, which has witnessed a lack of investment in recent years,
and aims to list the joint venture in five to seven years,
Reuters reported previously. 
($1 = 149.5400 yen)

 (Reporting by Fanny Potkin, Sam Nussey and Miho Uranaka;
Editing by Muralikumar Anantharaman)
 ((sam.nussey@tr.com;))