TSMC and Sony team up on US$7 billion semiconductor fabrication plant in Japan

TSMC is investing an initial US$2.12 billion in a new Japanese subsidiary, with another US$500 million from Sony to take a 20 per cent stake

The two companies said the project has “strong support” from the government amid efforts to ease the global chip shortage

Reading Time:2 minutes

A person walks into the Taiwan Semiconductor Manufacturing Co (TSMC) headquarters in Hsinchu, Taiwan, on October 20, 2021. The chip maker and Sony announced on Tuesday that they were building a US$7 billion fabrication plant together in Japan. Photo: AP

Published: 10:12am, 10 Nov 2021Updated: 10:12am, 10 Nov 2021

Taiwan Semiconductor Manufacturing Co will build a US$7 billion fabrication plant in Japan, with a subsidiary of Sony Group Corp becoming a minority shareholder in the venture.

The new factory comes during a persistent chip shortage, which has hit a wide range of global industries. Governments around the world have been racing to bolster their domestic chip manufacturing capabilities, in part by attempting to entice TSMC and its South Korean rival Samsung Electronics Co with financial incentives.

TSMC’s board approved on Tuesday an initial investment of up to US$2.12 billion to create a Japan-based subsidiary, the Taiwanese chip maker said a statement. Sony Semiconductor Solutions Corporation will invest US$500 million in the subsidiary, which will represent a less than 20 per cent equity stake.

The new venture has “strong support” from the Japanese government, the two companies added in a joint statement on Tuesday. It did not specify how Tokyo will offer its support, though Prime Minister Fumio Kishida said last month his government will set aside funding in the next economic stimulus package due by year-end.

“While the global semiconductor shortage is expected to be prolonged, we expect partnership with TSMC to contribute to securing a stable supply of logic wafers, not only for us but also for the overall industry,” Terushi Shimizu, president and chief executive officer of Sony Semiconductor Solutions Corporation, said in the joint statement.

Sony shares were little changed in early Tokyo trading.

The initial capital expenditure is estimated to be approximately US$7 billion. Construction of the TSMC fab is set to begin in 2022 with production expected to start by the end of 2024. The chip plant is expected to create about 1,500 jobs with a monthly capacity of 45,000 12-inch wafers initially made with mature 22- and 28-nanometre technologies.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x