Powerchip to build 2 wafer plants in NT$278 billion investment

2018/08/28 14:15:32 fontsize-small fontsize-default fontsize-big
Powerchip to build 2 wafer plants in NT$278 billion investment

Taipei, Aug. 28 (CNA) Powerchip Technology Corp., a contract semiconductor maker based in Taiwan, is to invest NT$278 billion (US$9.04 billion) to build two 12-inch wafer plants in northern Taiwan.

At a news conference held Monday, Powerchip founder Frank Huang (黃崇仁) said the plants will be located in the Hsinchu Science Park's Tongluo section in Miaoli.

In a lot spanning about 11 hectares, the two 12-inch wafer plants will produce 100,000 units in monthly capacity, which is expected to meet rising demand from drive IC suppliers, power management IC clients and specialty memory chip makers, Huang said.

The first phase of the NT$278 billion investment is scheduled to start in 2020 and mass production will begin in 2022. Construction on the following stages will start in 2025, 2027 and 2030.

Huang said the investment is expected to create more than 2,700 job opportunities in Taiwan.

He added that the choice of Tongluo means the investment will boost prosperity in Miaoli, thereby promoting a balance in regional high tech development.

Powerchip's investment is another major project in Taiwan following the recent announcement of a more than NT$600 billion project by contract chipmaker Taiwan Semiconductor Manufacturing Co. to build an advanced 3 nanometer plant, and a planned NT$335 billion investment ti build a 12-inch wafer plant by dynamic random access memory chip supplier Winbond Electronics Inc.

Huang said although Powerchip already has production sites in China, the company remains willing to increase investment in Taiwan because the Taiwanese semiconductor industry is highly competitive on the global market.

Huang said he is aware that China, which has intensified efforts to develop its own semiconductor industry, is poaching talent from Taiwan, South Korea and other countries, but Powerchip offers generous and competitive compensation so he is not worried at the prospect of a brain drain from the company.

However, Huang said he is concerned about a shortage of talent in Taiwan's high tech industry overall and urged the government to take action to enlarge the country's talent pool.

Powerchip was previously one of the leading dynamic random access memory (DRAM) chip suppliers in Taiwan, but after the global DRAM market faced supply gluts in 2007 and 2011, prices plunged and the company incurred debt of more than NT$100 billion, pushing its book value per share into negative territory.

The deteriorating financial situation forced Powerchip to delist its shares from the local over-the-counter (OTC) market in December 2012.

After delisting, Powerchip began to focus on the contract chipmaking business and has turned a profit since 2013.

Over the past five years, Powerchip made about NT$48.5 billion in accumulated net profit. In 2017, its net profit was NT$8.08 billion or NT$3.54 per share, making it the second most profitable contract chipmaker in the country after TSMC in terms of earnings per share.

Powerchip plans to take its shares onto the local main board or the OTC market in 2020.

(By Chu Tse-wei and Frances Huang)

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