Sony Group Corp and Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chip manufacturer, have entered into discussions to jointly build a new semiconductor plant in Japan’s Kumamoto prefecture.
The government wants an advanced semiconductor plant built in Japan and is planning to include related expenses to support the construction of the plant in the fiscal 2021 supplementary budget bill to be compiled after the lower house election.
According to sources, the new plant is expected to start operations by fiscal 2024. The total investment is expected to be around 800 billion yen ($7.1 billion), and the government is considering subsidising half that amount. Priority over the supply of products manufactured at the plant is expected to be one of the conditions to receive the subsidy.
The plant, which the sources said might be built near Sony’s image sensor plant in Kikuyo, is expected to produce semiconductors used in automobiles and home appliances.
Amid the Covid-19 pandemic, there has been a global shortage of semiconductors, a staple of industry.
Japan used to dominate the global chip market, with a 50 per cent market share in the late 1980s, but with the rise of Taiwanese and mainland Chinese companies, its market share has fallen to around 10 per cent in recent years.
The Japanese government believes that a stable supply of advanced semiconductors is essential for future economic growth, and has decided that cooperation with global companies is necessary to quickly establish a production system in Japan.
Semiconductor giant TSMC has been expanding its business overseas.
In Japan, the company announced in February this year that it plans to establish a research and development base for cutting-edge semiconductor materials in Tsukuba, Ibaraki prefecture.
As there are no factories in Japan capable of producing cutting-edge semiconductors, the Japanese government is urging the public and private sectors to conduct joint research and develop a production system.
THE YOMIURI SHIMBUN (JAPAN)/ASIA NEWS NETWORK