Under the agreement, PSMC and SBI will set up a new preparatory company, which will be responsible for tasks such as factory site selection, business plan formulation and funding.
PSMC, which is claimed to be the sixth-largest semiconductor foundry in the world, can produce both memory and logic semiconductors.
PSMC chairman Frank Huang said: “Through SBI, PSMC will develop more in-depth co-operative relations with Japanese industry, government, and academic circles, participate in the revitalisation of Japan’s semiconductor supply chain, and at the same time achieve further globalisation of PSMC’s production and sales to Taiwan plus one strategy.”
SBI CEO Yoshitaka Kitao, according to Reuters, said: “This is the best possible time to enter chip manufacturing.”
Kitao added that PSMC is now considering three or four potential locations for the 12 inch wafer foundry, and manufacturing may begin two years after the start of construction.
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The announcement coincides with Japan’s efforts to increase its chip production by offering foreign chip manufacturers billions of dollars in subsidies to get them to construct or increase manufacturing.
Tokyo has already committed to offering Y400bn ($2.8bn) support to Taiwan Semiconductor Manufacturing Company (TSMC) to aid with the construction of a factory in Kumamoto Prefecture.
Earlier this week, the European Union (EU) and Japan announced a semiconductor-focused partnership to decrease their dependence on China.