SBI to look for new partner for northern Japanese chip plant
PSMC's earnings have suffered from a supply glut of Chinese-made legacy chips. © Reuters
TOKYO/TAIPEI/MUMBAI -- Taiwan's Powerchip Semiconductor Manufacturing Corp. (PSMC) is pulling out of plans for a Japanese chip plant as the company shifts its focus to a technology partnership in India that will put less strain on its finances.
PSMC has told Japanese financial services group SBI Holding that it was unwilling to take on the risks associated with the Japan project. The two companies will dissolve a partnership they had formed to build the facility in northeastern Japan's Miyagi prefecture.
PSMC's move follows Thursday's announcement that it will provide technology for a chip plant to be built in India by Tata Group, one of the country's biggest conglomerates.
PSMC's earnings are under pressure as older legacy chips suffer from oversupply by Chinese rivals. The Taiwanese chipmaker has reported operating losses for five consecutive quarters through April-June of 2024.
SBI established a joint venture with PSMC in August 2023 and announced plans for the Miyagi plant in October.
Production was expected to begin in 2027 to supply automotive semiconductors, an area forecast to grow as more vehicles go electric. The total investment was estimated at 800 billion yen ($5.6 billion), with the Japanese government expected to provide up to 140 billion yen in aid.
Indian Prime Minister Narendra Modi met with Tata Sons Chairman Natarajan Chandrasekaran and PSMC Chairman Frank Huang on Thursday. (Modi's X account)
PSMC said in a statement Friday that it never had plans to invest in the Miyagi plant and had only expected to provide technology. The company said that the Japanese government had required mass production be maintained for at least 10 years as a condition for aid. PSMC said giving such a production guarantee would violate Taiwanese law.
SBI aims to move ahead with plans for a Miyagi chip plant and is looking for a new partner. It has a larger goal to turn the prefecture into a chip hub with the support of the local and national governments.
In addition to chipmaking, SBI aims to set up back-end production facilities for chip packing and testing, as well as data centers for artificial intelligence. SBI has little if any track record in the semiconductor industry and is seeking partners to reach its goals. In August, SBI decided to invest about 10 billion yen in Japanese AI unicorn Preferred Networks.
PSMC remains keen on overseas expansion. On Thursday, Tata Electronics and PSMC announced a final agreement to build a semiconductor factory in Gujarat, western India.
The plant will be the first in India to use 300-millimeter diameter wafers. It will produce legacy chips for such applications as power management and displays with a monthly production capacity of 50,000 units and employ more than 20,000 people, according to the companies.
Investments are expected to total as much as 910 billion rupees ($10.9 billion), but Tata will shoulder the construction and operation costs. PSMC will support the project by licensing its production technology.
The Indian government announced at the end of February that it had approved plans to establish several semiconductor factories, including the new Tata-PSMC Gujarat plant.
Also on Thursday, Indian Prime Minister Narendra Modi met with Natarajan Chandrasekaran, chairman of Tata Sons, the Tata Group's umbrella company, and PSMC Chairman Frank Huang. "PSMC expressed enthusiasm to further expand its footprint in India," Modi posted on his official account on X, formerly known as Twitter.
In a statement dated Thursday, Chandrasekaran said the partnership with PSMC will greatly accelerate Tata's roadmap to become a pioneer in semiconductor manufacturing in India. Tata Electronics recently announced a partnership with Japanese chip equipment maker Tokyo Electron in research and development and other areas.
asia.nikkei.com
PSMC's earnings have suffered from a supply glut of Chinese-made legacy chips. © Reuters
TOKYO/TAIPEI/MUMBAI -- Taiwan's Powerchip Semiconductor Manufacturing Corp. (PSMC) is pulling out of plans for a Japanese chip plant as the company shifts its focus to a technology partnership in India that will put less strain on its finances.
PSMC has told Japanese financial services group SBI Holding that it was unwilling to take on the risks associated with the Japan project. The two companies will dissolve a partnership they had formed to build the facility in northeastern Japan's Miyagi prefecture.
PSMC's move follows Thursday's announcement that it will provide technology for a chip plant to be built in India by Tata Group, one of the country's biggest conglomerates.
PSMC's earnings are under pressure as older legacy chips suffer from oversupply by Chinese rivals. The Taiwanese chipmaker has reported operating losses for five consecutive quarters through April-June of 2024.
SBI established a joint venture with PSMC in August 2023 and announced plans for the Miyagi plant in October.
Production was expected to begin in 2027 to supply automotive semiconductors, an area forecast to grow as more vehicles go electric. The total investment was estimated at 800 billion yen ($5.6 billion), with the Japanese government expected to provide up to 140 billion yen in aid.
Indian Prime Minister Narendra Modi met with Tata Sons Chairman Natarajan Chandrasekaran and PSMC Chairman Frank Huang on Thursday. (Modi's X account)
PSMC said in a statement Friday that it never had plans to invest in the Miyagi plant and had only expected to provide technology. The company said that the Japanese government had required mass production be maintained for at least 10 years as a condition for aid. PSMC said giving such a production guarantee would violate Taiwanese law.
SBI aims to move ahead with plans for a Miyagi chip plant and is looking for a new partner. It has a larger goal to turn the prefecture into a chip hub with the support of the local and national governments.
In addition to chipmaking, SBI aims to set up back-end production facilities for chip packing and testing, as well as data centers for artificial intelligence. SBI has little if any track record in the semiconductor industry and is seeking partners to reach its goals. In August, SBI decided to invest about 10 billion yen in Japanese AI unicorn Preferred Networks.
PSMC remains keen on overseas expansion. On Thursday, Tata Electronics and PSMC announced a final agreement to build a semiconductor factory in Gujarat, western India.
The plant will be the first in India to use 300-millimeter diameter wafers. It will produce legacy chips for such applications as power management and displays with a monthly production capacity of 50,000 units and employ more than 20,000 people, according to the companies.
Investments are expected to total as much as 910 billion rupees ($10.9 billion), but Tata will shoulder the construction and operation costs. PSMC will support the project by licensing its production technology.
The Indian government announced at the end of February that it had approved plans to establish several semiconductor factories, including the new Tata-PSMC Gujarat plant.
Also on Thursday, Indian Prime Minister Narendra Modi met with Natarajan Chandrasekaran, chairman of Tata Sons, the Tata Group's umbrella company, and PSMC Chairman Frank Huang. "PSMC expressed enthusiasm to further expand its footprint in India," Modi posted on his official account on X, formerly known as Twitter.
In a statement dated Thursday, Chandrasekaran said the partnership with PSMC will greatly accelerate Tata's roadmap to become a pioneer in semiconductor manufacturing in India. Tata Electronics recently announced a partnership with Japanese chip equipment maker Tokyo Electron in research and development and other areas.
Taiwan chipmaker PSMC abandons Japan plans after India deal
SBI to look for new partner for northern Japanese chip plant
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