TSMC and Sony To Jointly Build Chip Factory In Japan: Report

The planned investment comes as major economies like the U.S. and Europe are also racing to bring semiconductor production onshore for national security reasons

Amid the ongoing global semiconductor crisis, the world’s largest chipmaker Taiwan Semiconductor Manufacturing Company (TSMC) and Sony Group are considering joint construction of a semiconductor factory in Japan which will be funded partly by the Japanese government, media agency Nikkei reported.

The potential factory, which is supposed to be constructed in Kumamoto in Southern Japan, would yield a total investment of around 800 billion yen ($7 billion). The Japanese government is likely to provide up to half the amount, the publication has learnt.

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The plant is expected to produce semiconductors for automobiles, camera image sensors and other products which have been hit by a global chip shortage, and is likely to start operations by 2024.

The planned investment comes as major economies like the U.S. and Europe are also racing to bring semiconductor production onshore for national security reasons.

Sony will also help prepare the factory site, as per the report. Its aim is the stable procurement of semiconductors for its image sensors.

The Japanese government plans to subsidize about half of the project’s total cost. Mindful of economic security, the government decided it is essential to build domestic production capacity for advanced semiconductors.

In exchange for subsidies, the government will seek a commitment that chip supplies to the Japanese market will take priority.

Japan’s top auto parts maker Denso is also looking to participate through such steps as setting up equipment at the site.

The factory will make semiconductors used in-camera image sensors, as well as chips for automobiles and other products, and is slated to go into operation by 2024, the people said.

Plans for the facility — which would be TSMC’s first chip production operation in Japan — come as the global tech industry grapples with unprecedented semiconductor shortages and supply chain disruptions.