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TSMC and Sony to build a $7 billion fab lab in Japan

By Yashasvini on Nov 10, 2021 | 04:30 AM IST

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• TSMC’s board approved an equity investment of up to $2.12 billion while Sony Semiconductor will invest $500 million

• The two companies announced plans to set up a joint venture, Japan Advanced Semiconductor Manufacturing Inc (JASM)

Taiwan Semiconductor Manufacturing Co. (TSMC) and Sony Group Corp. said Tuesday that they intended to build a $7 billion chip plant in Japan and expected strong support from the Japanese government.

TSMC and Sony Semiconductor, a wholly-owned subsidiary of Sony Group Corp, announced plans to set up a joint venture, Japan Advanced Semiconductor Manufacturing Inc (JASM), to build a semiconductor fabrication laboratory in Japan’s Kumamoto Prefecture that would initially produce 22-nanometer and 28-nanometer chips.

TSMC’s board approved an equity investment of up to $2.12 billion to establish a majority-owned unit in Japan. Sony Semiconductor will invest $500 million in JASM, giving it a less than 20% stake, it said in a joint statement with TSMC.

The construction of the plant is scheduled to start in 2022 and the production is targeted to begin by the end of 2024.

“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 Dr. CC Wei, Chief Executive Officer of TSMC. 

TSMC and Sony said the plant is expected to create about 1,500 high-tech professional jobs, and that the initial capital expenditure is estimated to be about $7 billion.

ALSO READ: Global semiconductor chip shortage triggers a profiteering season for manufacturing giants

Earlier in July, TSMC has unveiled its plan to build new factories in the United States and Japan with a surge in the demand of chips.

READ MORE: TSMC planning to build new factories in US, Japan

The worldwide semiconductor scarcity has crippled various industries, especially automakers, for over a year. The crisis has intensified amid supply chain bottlenecks in Asian countries and the growing concern over new strains of coronavirus that cause COVID-19.

ALSO READ: Auto industry hits a bump as semiconductor shortage pinches amid COVID-19 slump, unsteady US-China ties

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