Rexchip: a 50-50 DRAM fab in Taiwan with Powerchip (2007)

What a site chosen on tax and land left behind

A lease at ¥900,000 per hectare a month, against land selling at ¥200 million a hectare. That gap is not the kind a manager’s resolve or an engineer’s skill can close. Judged against the conditions of the time, Sakamoto Yukio’s choice of Taichung was rational: alone, Elpida could not reach Samsung’s 200,000 wafers a month; with Powerchip it would reach 390,000. Building in Japan meant fewer wafers for the same money. In an industry decided by scale, location is not something a company chooses so much as something the conditions decide.

That this rationality did not mesh with the logic of public support surfaced from 2009 onward. The state’s reason for putting in ¥30 billion was to keep a DRAM industry in Japan, which does not square with having the most advanced volume production in Taichung. The clearest sign of the mismatch is that in the post-bankruptcy auction, the bidders put their money on the Taiwanese plant rather than on Hiroshima. In an age when companies choose countries, a country tried to choose its company again — and the gap between the two cast its shadow over the half-measure of the later bailout.