Japanese electronics maker Sony and TSMC of Taiwan said Tuesday they plan to jointly build a computer chip plant in Japan with an initial investment of $7 billion.
The plant in the southwestern city of Kumamoto will be the first foundry in Japan for TSMC, one of the world’s leading chipmakers. Construction will start next year for the plant to be up and running by 2024, employing 1,500 high-tech professionals.
The move comes as a supply crunch in chips has slammed various Japanese companies, including automaker Toyota Motor Corp. and video-game maker Nintendo Co., as lockdowns and other coronavirus measures in parts of Asia have hurt chip production.
Sony Semiconductor Solutions Corp., a wholly owned subsidiary of Sony Corp., will be a minority stakeholder, with less than 20% equity, investing $500 million in the new TSMC subsidiary, Japan Advanced Semiconductor Manufacturing.
The overall investment is getting “strong support from the Japanese government,” the joint statement said.
The deal is subject to regulatory approval.
Terushi Shimizu, president of Sony Semiconductor Solutions, said the global semiconductor shortage was expected to continue. The partnership with TSMC will help not only Sony but also other companies, he said.
There has been speculation other Japanese companies, such as Toyota Motor Corp., may join the project, but TSMC declined comment, saying nothing was decided.
“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,” said Chief Executive C.C. Wei.