Taipei, Taiwan – October 2, 2024 – Powerchip Semiconductor Manufacturing Corporation (PSMC), a leading Taiwanese foundry, has announced a strategic shift in its global expansion plans, opting to scrap a previously announced semiconductor fab project in Japan in favor of building a new fab in Gujarat, India. The decision comes following the dissolution of PSMC’s partnership with Japan’s SBI Holdings.
In a significant move, PSMC will now provide the process technology for the Indian fab, while Tata Group, India’s largest conglomerate, will invest $10.9 billion to finance the construction of the facility. The fab will primarily manufacture power management integrated circuits (PMICs) and display driver ICs, critical components for a wide range of electronics.
Shift from Japan to India
Last year, PSMC and SBI Holdings had announced plans to build a 40,000 wafer-per-month (wpm) fab in Sendai, Japan, utilizing 40nm technology and transitioning to 28nm with volume production slated for 2027. However, the collaboration has now been dissolved as PSMC shifts its focus to the Indian market.
SBI Holdings has expressed its intention to seek a new partner to continue the Sendai fab project and to establish a backend semiconductor operation in Japan.
Strategic Collaboration with Tata Group
The decision to pivot to India was solidified last week when Indian Prime Minister Narendra Modi met with Natarajan Chandrasekaran, Chairman of Tata Group, and Frank Huang, Chairman of PSMC. Modi highlighted PSMC’s enthusiasm to expand its presence in India, signaling the importance of the partnership for India’s growing semiconductor industry.
The new fab in Gujarat marks a major step forward in India’s ambition to become a global player in semiconductor manufacturing. Powerchip’s cutting-edge process technology, combined with Tata’s substantial financial backing, is expected to accelerate India’s semiconductor production capabilities. The Gujarat fab will be instrumental in producing advanced PMICs and display drivers, with far-reaching applications in consumer electronics, automotive, and industrial sectors.
Industry Challenges and Future Outlook
PSMC’s decision to invest in India comes at a time when the company has reported operating losses for five consecutive quarters, up to Q2 2024. The partnership with Tata is seen as a critical move to bolster its operations and tap into India’s rapidly growing demand for semiconductors.
This collaboration is part of a broader trend of semiconductor manufacturers looking to diversify their global supply chains amidst geopolitical tensions and supply disruptions, with India emerging as a key player in the global semiconductor ecosystem.
