Sony and TSMC in talks for new US$7 billion chip plant in Japan

The global chip shortage and other global stability issues could be behind a proposed joint initiative between Sony and TSMC to open a chip production plant in Japan. According to both Reuters and Nikkei, the two tech giants are in discussions to open a semiconductor factory in the Kumamoto Prefecture. The proposed site is on land owned by Sony near where it produces its massively in-demand image sensors.

Sony is no stranger to chip design having partnered with IBM and Toshiba to design and develop the Cell processor that powered the Sony PlayStation 3 console. If the plan goes ahead, the factory would be up and running by 2024 and would focus on developing camera chips and silicon for the car market among other segments. Sony could be interested in using the opportunity to develop custom chips for its own Alpha cameras and even silicon for its own Apple Car-like automotive ambitions.

TSMC is currently the major supplier of smartphone silicon for Apple and many other companies. However, it is based in Taiwan which is currently facing an uncertain future as China seeks to assert its control over the country. Decentralising its operations elsewhere in Asia makes strategic sense for the company while it would also help it more easily meet orders for silicon fabricated on its state-of-the-art process nodes. The Japanese government is keen to see the plan come to fruition, offering up to half of the $7 billion project cost.

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