Sony to partner with TSMC for Japan-based foundry

Sony to partner with TSMC for Japan-based foundry
Business news |
The chip crisis is creating new coalitions and ecosystems in the automotive supply chain. This is currently evident in a joint venture between Sony and chip manufacturer TSMC. Tier-one supplier Denso is pondering whether to join in.
By Christoph Hammerschmidt

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According to Japanese media reports, Denso’s participation could take the form of setting up its own production equipment in the planned factory. The company, which belongs to the Toyota Group, is regarded as Japan’s leading automotive supplier. Together with its customers, Denso is striving to put the supply of semiconductor components for vehicles on a reliable basis.

Sony, Japanese media speculate, may take a minority stake in a new company that will operate the planned semiconductor factory in Kumamoto Prefecture on land owned by Sony near the company’s image sensor factory, according to Japan’s Nikkei news service, citing people familiar with the matter. The fab will produce semiconductors for image sensors in car cameras as well as chips for automobiles and other products and is expected to be operational by 2024.

The company has a market share of about 50% in the global market for image sensors. However, only a small share of this is likely to go to customers in the automotive industry; by far the larger share is destined for consumer markets such as smartphones and cameras. Sony operates several production facilities for such sensors. However, the semiconductors that process the images are sourced from third-party suppliers, including TSMC.

The plant would be the first semiconductor manufacturing facility of Taiwan-based chipmaker TSMC in Japan. The currently discussed plans for joint chip manufacturing with Sony come at a time when the global tech industry is grappling with unprecedented semiconductor shortages and supply chain disruptions. TSMC had confirmed in July that it was “actively reviewing” plans for the project. Nikkei Asia had previously reported that TSMC was in the process of making its decision and was open to working with Sony.

With political tensions rising between the People’s Republic of China and Taiwan, concerns about stability in the semiconductor supply chain are taking hold in customer industries – and at a time that could not be more inconvenient for the automotive industry due to global supply shortages of semiconductor components. The Japanese government is said to support the project with subsidies totalling about $ 7 billion. There is talk of Japan contributing up to 50 % of the sum. In return for the subsidies, the Japanese market will be supplied with chips as a priority, Nikkei reported.

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