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Taiwanese semiconductor manufacturer Powerchip has selected Miyagi prefecture, Northern Japan, for a $5.4bn foundry in partnership with Japanese financial firm SBI Holdings.

The first phase, estimated to cost $2.8bn and scheduled for 2027, will see the foundry produce 40-nanometre and 55-nanometre technology with a monthly output of 10,000 wafers, a slim slice of a semiconductor.

The second phase will have a monthly output of 40,000 wafers.

Taiwanese chipmakers are increasingly looking to Japan for manufacturing. In July this year, Taiwan’s TSMC announced that it would postpone a $40bn expansion to its Arizona site during its quarterly earnings call which saw profits fall for the first time in four years

The company is instead developing a $8.6bn factory on the Japanese island of Kyushu and is anticipated to begin selling chips in 2024.

Last week, secretary general of the Liberal Democratic Party, Yoshihiro Seki, said Japan plans to acquire $10bn of additional funds in subsidies for a second TSMC factory in Kumamoto and domestic chip venture Rapidus Corp.

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By GlobalData

TSMC’s second Japanese factory is expected to cost $13bn and will produce 2-12 nanometer logic chips.

TSMC is the world’s largest chipmaker and ranked eighth overall on GlobalData’s 2023 Q1 thematic scorecard for semiconductor manufacturers. 

Additionally, Japan’s government has also promised to donate ¥300bn ($20m) towards promoting science and engineering within its universities. The government also plans to introduce schemes to help students from middle-income households enter higher education.

The EU announced in July that it will strengthen its cooperation with Japan on the production of semiconductors – as countries move to decrease their dependence on China.