TSMC and Sony partner to build $7 billion chip plant in Japan

TSMC and Sony have joined forces to build a $7 billion chip factory in Japan as the country aims to secure future semiconductor supplies by attracting foreign chipmakers.

TSMC and Sony will work together in a joint venture partnership to establish the factory in Kumamoto, which will be TSMC’s first-ever chip fab in the country. The construction is scheduled to begin in 2022 and finish by 2024, create 1,500 high-tech jobs, and produce 45,000 12-inch wafers per month.

TSMC said the initial funding would be around $7 billion, some of which would be provided by the Japanese government. Sony will invest $500 million, representing a 20% equity stake in the project, according to a statement published by the companies.

The factory is set to sit near an existing plant owned by Sony and produce 22 and 28 nanometre chips, to help meet demand for components like image sensors and automotive microcontrollers.

“The digital transformation of more and more aspects of human lives is creating incredible opportunities for our customers, and they rely on our specialty [sic] processes that bridge digital life and real life,” said CC Wei, chief executive officer of TSMC.

“We are pleased to have the support of a leading player and our long-time customer, Sony, to supply the market with an all-new fab in Japan, and also are excited at the opportunity to bring more Japanese talent into TSMC’s global family.”

Japan has been seeking to attract foreign chipmakers through financial incentives as it aims to secure future chip supplies amid a global shortage. Since the country imports over 60% of its semiconductors from overseas, there are concerns that tense global relationships could affect supply chains in the future, with one official saying that semiconductors are now as important as food or energy.

In June, the country approved a $338 million semiconductor research project that will see TSMC develop new chip technology in the country, with over 20 Japanese companies taking part too. The government agreed to fund half the research project, which will focus on 3D chip assembly to allow the creation of components that are more dense but still small, to try and boost the country’s competitiveness in this sector.