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Published on : Oct 20, 2015

Powerchip Technology, the Taiwan-based foundry and the Hefei city government of the Anhui province in China recently held a groundbreaking ceremony for a joint venture company. The company, with estimated investments of US$ 2.1 bn will provide 12-inch wafer foundry grounding mainly for LCD driver ICs.

The joint venture is expected to enter volume production towards the end of October 2017, which will have a manufacturing capacity of almost 40,000 wafer starts every month.

The Powerchip founder Frank Huang, and chairman of the company Steve Chen, along with the Mayor of Anhui province Zhang Qingjun hosted the ceremony, which also received participation from Wenwu Ding, the CEO of the China National IC Fund.

The cooperation talks for the joint venture started in December 2014, when Zhang made a visit to Powerchip, as disclosed by Huang, the founder of Powerchip. In about 10 months, construction of the 12-inch fab in Hefei has commenced, as stated by Huang.

Hefei Construction Investment and Holding, which is a government-owned subsidiary shall be responsible for construction of the fab. On the other hand, Powerchip will furnish foundry technologies and bring in customers from Taiwan.  In Taiwan, companies such as Novatek Microelectronics, Raydium Semiconductor, and Himax Technologies, which are known for their LCD driver IC design expertise are slated to be among potential clients.

Hefei is also the location of the 6G and 8.5G plants of BOE Technology. Earlier this year in August 2015, BOE revealed plans for establishing an IC industry fund that would be worth CNY4 bn, backed with a few government supported investors such as National IC Fund in order to establish a local panel-related IC production supply chain.

The joint venture fab between the local, government and Powerchip could play a role in China’s pursuit for a homegrown industry that has a focus on the production of panel display using chip components.