Chip contracting giant Taiwan Semiconductor Manufacturing Co (TSMC) is reportedly considering jointly building a chip factory in Japan with Sony Corp.

This is according to a report in Asia Nikkei, which also stated that the Japanese government is ready to be involved to help cover the $7.15bn cost to build the chip plant.

The two firms are said to considering constructing a chip factory in Western Japan, at a time when the world dealing with a significant chip shortage and stressed global supply chains.

Japanese factory

Nikkei Asia reported that the Japanese government could cover as much as half of $7.15bn build cost.

And according to the Nikkei Asia report, Sony may also take a minority stake in a new company that will manage the factory, which will be located in Kumamoto Prefecture.

This is apparently land owned by Sony, and the new facility would be located in an area adjacent to Sony’s image sensor factory, according to multiple people familiar with the matter.

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

If the two parties go ahead, the plant will be the first chip factory in Japan for TSMC, and it comes after the Taiwanese firm said in the summer it was considering building a Japanese factory.

Chip expansion

Earlier this year TSMC said it would invest $100 billion into manufacturing advanced chips over the next three years, to keep up with rising demand.

The company began construction in June of its $12 billion chip facility in Arizona, but has cooled speculation that it is eyeing the construction of a chip wafer plant in Germany.

It said the Germany factory was “too early to say”.

But individual countries and regions are keen to construct their own chip factories, due to economic or national security concerns.

The European Union in March this year for example announced it wanted to produce at least 20 percent of the world’s cutting-edge semiconductors by the end of the decade.

But Morris Chang, the founder TSMC warned in July that individual countries’ efforts to boost domestic semiconductor production could fail, in spite of massive financial outlays.

“If no one says anything about this, it could turn out to be terrible,” Chang reportedly said at a news conference during APEC, where he was Taiwan’s representative.

“What may happen is that, after hundreds of billions and many years have been spent, the result will still be a not-quite-self-sufficient, and high-cost, supply chain,” Cheng reportedly told the conference.

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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