The bankruptcy of JS Foundry, which aimed to revitalize the semiconductor industry with government support, was due to lower-than-expected market growth and fierce competition from overseas players.
JS Foundry Co., Ltd.|Teikoku Databank Co., Ltd.
🟦 JS Foundry goes bankrupt, power semiconductor concept is frustrated
JS Foundari filed for bankruptcy with the Tokyo District Court and received a decision to commence proceedings. The company’s total debt amounted to 16.1 billion yen, and the company’s challenge, which was expected to be a model for restructuring the domestic power semiconductor industry, came to an end in just two and a half years.
- The company was established in December 2022 with investment from a political investment bank fund and other sources, with the aim of reusing the aging Niigata plant of onsemi (USA).
- It specialized in contract manufacturing of “withered technologies” such as power semiconductors and analog semiconductors, and was attracting attention as a regenerative model that made use of skilled human resources and equipment.
- However, due to sluggish demand for EVs and intensifying competition from Chinese manufacturers, the company terminated its business with onsemi, its main customer. After that, customer development did not progress, and revenue plummeted.
🟦 Market slowdown and the rise of Chinese players hit directly, structural issues behind the collapse
The bankruptcy of JS Foundry is not just a poor management of one company, but highlights the difficulty of Japan’s power semiconductor revitalization initiative itself. The growth of the EV market has slowed more than expected in Europe and the United States, while in China, local companies are supplying large quantities of low-priced products on the back of government support. This has led to intensified global price competition, making it impossible for mid-sized fabs like JS Foundry to compete.
In addition, it has been pointed out that there was a structural problem that the sales function was weak because it was originally an in-house production base of onsemi, and it was difficult to acquire new customers. Against this backdrop, we proceeded with capital alliance negotiations with a Taiwanese company to switch to silicon carbide (SiC) power semiconductors, but in the end the negotiations fell apart and the company’s cash flow collapsed.
🟦 Summary
The bankruptcy of JS Foundry shows that the model of repurposing aging equipment and remanufacturing with skilled personnel did not match the market.
In order to transform the manufacturing division, which was originally based on in-house production, into an outsource-facing foundry business, it is necessary to make a major change not only in technology but also in “culture” and “awareness.”
