Japan Policy Investment Bank Acquires US Semiconductor Company Factory... Government-Led Foundry Industry Development

Policy Investment Bank and Itochu
Invest 191.9 Billion Won in Fund Contribution
Acquisition of World's 2nd Largest Semiconductor Factory
Outsourced Production to Start Next Month
Introduction of Advanced Equipment and Employment Succession

[Image source=EPA Yonhap News]

[Asia Economy Reporter Lee Ji-eun] The Development Bank of Japan (DBJ) and Itochu Corporation, one of Japan's five major general trading companies, are acquiring a semiconductor factory in Niigata Prefecture owned by Onsemi, the world's second-largest power semiconductor company. The two companies plan to invest a total of 20 billion yen (approximately 191.9 billion KRW) through an investment fund covering the purchase amount and facility investments, aiming to establish Niigata Prefecture as a hub for semiconductor foundry production in Japan.

On the 1st, Nihon Keizai reported that DBJ and Itochu Corporation intend to purchase the semiconductor factory owned by Onsemi located in Ojiya City, Niigata Prefecture. DBJ is a government-owned policy finance institution established by merging the Development Bank of Japan and Hokkaido-Tohoku Development Finance Corporation.

Mercuria Holdings, an investment asset management company, will mediate the merger and acquisition (M&A) process for this factory purchase, and Sanyo Sosei Advisors, an investment advisory firm, will serve as consultants. Fukuoka Capital Partners, affiliated with Fukuoka Bank, will also participate in the factory acquisition.

After completing the factory purchase, DBJ and Itochu plan to introduce state-of-the-art production facilities and begin semiconductor foundry production starting next month. Employment contracts for the approximately 600 employees currently assigned to the factory will be maintained.

The Niigata Prefecture factory they intend to acquire was established in 1985 by Matsushita Electric, the predecessor of Panasonic. It is equipped with a cleanroom of approximately 67,000 square meters (about 20,000 pyeong), necessary for semiconductor production. Onsemi, headquartered in Arizona, USA, acquired the factory in 2011 and has been producing power semiconductors designed by the company there.

The reason the two companies are acquiring Onsemi's factory is that existing factories in Japan are facing difficulties producing cutting-edge products due to aging facilities. As of 2019, there are 84 semiconductor front-end process factories in Japan, but most were built in the 1980s, are small in scale, and have aging facilities. Since these factories are old, there are many production personnel domestically who possess manufacturing know-how, making it easier to carry out power semiconductor production, which requires process linkage.

Nihon Keizai reported that there is a possibility that the movement to produce semiconductor hubs led by financial institutions will spread in the future. Nihon Keizai stated, "Financial institutions are supporting the growth of the semiconductor industry by supplying funds," and forecasted, "The trend of finance leading the creation of new semiconductor hubs and enhancing industrial competitiveness through investment funds and other means is expected to increase."

This content was produced with the assistance of AI translation services.