TAIPEI (Taiwan News) — The world’s largest memory chip packaging and testing service provider is mulling whether to expand operations in Japan.
Powertech Chair D.K. Tsai (蔡篤恭) told Nikkei Asia on Friday (Jan. 12) that the company is reviewing a plan to construct a high-end chip packaging facility in Japan. Tsai said plans would only move forward if it could find partners for the project.
Due to the higher cost of operating chip assembly and packaging in Japan compared to Taiwan, Tsai told Nikkei Asia that it only made sense to focus on advanced and high-end chip packaging there. He said Powertech is talking to customers to see if they are interested in investing in Japan.
Powertech’s interest in expanding in Japan comes as it reduces production in China. It sold its chip packaging facilities in Xian to Micron Technology and ones in Suzhou to Longsys Electronics in 2023, per Nikkei Asia.
The lion’s share of its production is still in Taiwan. Powertech services customers like Intel, Micron, Kioxia, and MediaTek, according to Nikkei Asia.
Tsai also told Nikkei Asia that it’s around twice as expensive to run a chip packaging factory in Japan compared to Taiwan. He said one way forward would be to find partners like Taiwan Semiconductor Manufacturing Co. (TSMC) is doing with Sony and Denso for its first Japanese fab in Kumamoto.
The company also said another possible issue with going to Japan is the availability of talent. Powertech said if it is unsuccessful at expanding in Japan, it may look to Southeast Asia for future expansion.