Overcoming Global Chip Crisis, TSMC And Sony Build Factory In Japan

JAKARTA - In order to overcome the global chip crisis, Taiwan Semiconductor Manufacturing Co Ltd (TSMC) and Sony Group Corp have agreed to build a factory in Japan. Later the factory will mostly produce chips funded by the local government of 7.15 billion US dollars or equivalent to Rp. 101.6 trillion.

The plant, which will be located in Kumamoto, southern Japan, is expected to produce semiconductors for cars, camera image sensors and other products that have been hit by a global shortage of chips. It is likely to start operating in 2024.

This collaboration began in response to an ongoing shortage of chips, and has prevented many companies from meeting demand for their products.

TSMC is the world's largest contract chipmaker and a major supplier of semiconductors for Apple products. TSMC previously said in July that it was reviewing plans to arrange production in Japan.

TSMC is concerned about the concentration of chip-making capabilities in Taiwan, which produces most of the world's most advanced chips. In addition, this plant was also built for the sake of economic security, where the government decided it was important to build domestic production capacity for advanced semiconductors.

In return for the subsidy, the government will seek a commitment that the supply of chips to the Japanese market will be prioritized.

Previously reported, AMD CEO Lisa Su said in September that she believed supply of chipsets would increase by 2022, and market research group IDC suggested there could be an oversupply problem in 2023.

That could be a problem for tech companies, but with governments around the world looking to build at least some level of domestic semiconductor production in the wake of this shortfall, it seems unlikely that plans like TSMC and Sony are scrapped as a result.