September 30, 2024 /SemiMedia/ — Powerchip Semiconductor has decided to terminate its partnership with Japan's SBI Holdings on the planned new semiconductor plant, according to a report by Nikkei. Powerchip confirmed it has halted the collaboration and has informed both Japan’s Ministry of Economy, Trade and Industry (METI) and SBI Holdings of its decision.

The partnership with SBI was structured under a FabIP model, where Powerchip would provide consultancy services, staff training, and technology transfer, while receiving service fees and royalties from the Japanese partner. Powerchip had no plans to take equity or play a leading role in the operation of the new plant.

SBI had applied for subsidies from METI and received support from the Japanese government. However, METI’s subsidy conditions required the new plant to guarantee continuous production for over 10 years. Since SBI, a financial firm, lacks semiconductor industry experience, METI insisted that Powerchip share the guarantee responsibility.

Powerchip, a publicly listed company in Taiwan, stated that guaranteeing the operations of a plant it does not control would violate Taiwan's securities regulations. As a result, Powerchip’s board resolved to terminate the partnership several months ago, notifying METI and SBI of its decision.