That’s too bad! The 38 billion wafer foundry project fell through!
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Powerchip Semiconductor Manufacturing Corporation (PSMC) officially announced on October 11th that the memorandum signed earlier with Japanese company SBI Holdings Inc. has expired and become invalid. The memorandum was originally intended to explore the feasibility of cooperation in semiconductor foundry business in Japan.
According to the announcement from Li Jidi Electric on the 11th, the specific date marked for the expiration of the memorandum is October 11 in the 113th year. (Note: "113th year" may be a typo or a specific numbering system, usually the year should not exceed the current year, this interpretation is that it is a special format for recording dates.) The counterparty to the expired contract is SBI Holdings Inc. The two parties signed this non-binding memorandum on June 26 in the 112th year to assess the feasibility of joint cooperation in semiconductor foundry business in Japan, and the memorandum expired and automatically became invalid on June 26 in the 113th year.
Previously, Li Ji Electric has informed SBI that due to the deterioration of the company's performance, they are unable to bear the risk of the collaboration business. Despite this, SBI still plans to proceed with the construction of the semiconductor factory in Miyagi Prefecture and actively seek new partners to restructure its organization.
According to sponsor advertisements and related reports, it was pointed out that SBI and PSMC established a joint venture in August 2023, and announced plans to build a semiconductor factory in Miyagi Prefecture in October of the same year. The factory is expected to start production in 2027, producing automotive semiconductors to meet the increasing demand due to the trend of electrification. The total investment for this plan amounts to as high as 800 billion yen (approximately 37.9056 billion RMB), with the government planning to provide up to 140 billion yen in subsidies in the initial investment stage.
However, due to the deteriorating performance of PSMC, especially the impact of oversupply of semiconductors from Chinese enterprises on its mature process semiconductor production, the entire market has fallen into difficulties. PSMC has experienced consecutive quarters of operating losses. Therefore, PSMC has decided to prioritize rebuilding its existing business and has withdrawn its plan to construct a wafer factory in Japan.
Despite the termination of the collaboration with PSMC, SBI still plans, with the support of the Miyagi Prefecture and the government, to develop Miyagi Prefecture into a manufacturing base for the semiconductor industry. This includes the establishment of semiconductor manufacturing, backend factories, and the construction of artificial intelligence (AI) data centers. Since SBI lacks professional expertise in semiconductor development and design, cooperation with specialized companies is essential. Currently, SBI has begun negotiations with several new potential partners.
In addition, in August, SBI also decided to invest approximately 10 billion Japanese yen in Preferred Networks, a startup engaged in AI services. SBI plans to incorporate Preferred Networks' AI semiconductor design technology and jointly develop AI semiconductors. This move will further drive SBI's layout and development in the semiconductor field.
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