We are almost two years into a global chip shortage that isn’t seeing any end in sight. It is affecting the manufacture of anything with silicon in it – from computers and graphics cards, to phones, emergency equipment and even cars. TSMC and Sony are considering building a joint semiconductor factory in western Japan, according to reports.
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While Sony isn’t traditionally a semiconductor manufacturer, they have massive need for it. They are struggling to keep up with demand of its popular digital cameras and could outfit the factory with TSMC to build several different types of semiconductors. TSMC would have majority control, but the plant would operate on Sony land near that company’s image sensor factory. It has been reported that the Japanese government would cover up to half of the expected $7 billion investment in the factory.
The intention for the partnership would be to provide chips for cameras, cars, and other possible purposes in the future. As a result, Denso (a cars part giant), is supposedly interested in the project and might invest as well. The planned opening date for the factory is currently sitting in 2024, although this might change depending on the types of investments that are made.
We expect to see more such joint projects going forward. The chip shortage is expected to last until at least 2023. Partnerships such as these are a ‘quick win’ in order to bring stability to the supply chain sooner, with the various parties all benefiting by fulfilling their own needs.
Tensions between the US and China could also hamper TSMC production sitting in Taiwan, so having other manufacturing plants outside the greater China region could mitigate risk for the Taiwanese semiconductor manufacturer. TSM expect highly automated and autonomous cars to be commonplace by 2024, and they need very specific types of processors which they want to supply to car manufacturers, so this factory could be ready just in time for the boom.
