The deal worth USD 7 Bn establishes joint venture company Japan Advanced Semiconductor Manufacturing.
TSMC's board of directors has officially approved plans to build a chip factory in Kumamoto Prefecture, its first-ever Japanese plant. Sony is set to invest USD 500 million and will hold no more than a 20% stake in the joint company, according to a statement released on Tuesday. The project will be Japan’s largest locally-supported endeavour for a foreign-controlled company, with billions of Japanese Yen in subsidies. It will create 1,500 high-tech professional jobs in Japan, with construction of the chip plant scheduled to begin in 2022 and production slated to begin in 2024. TSMC already has a plant in Nanjing and is currently constructing a plant in Arizona in the U.S. with considerations to build a new chip facility in Germany.
The semiconductor industry has been a top priority for many nations grappling with recent supply chain shortages. Japan’s response to the crunch is a framework for subsidies that allows companies to build chip factories in the nation. The conditionality is that firms must respond to requests for increased production and prioritize supply to domestic companies should supplies of semiconductors become tight. Sony is TSMC’s biggest client in Japan making the deal quite worthwhile for both ends. The plant will produce state-of-the-art 7-nanometer chips as well as less advanced but versatile 22- to 28-nanometer chips.
TSMC was founded in February 1987 by Zhang Zhongmou and is headquartered in Taiwan. It is a professional integrated circuit manufacturing server with the world's most advanced semiconductor technology.