Sony builds new factory in Thailand to produce automotive image sensors

According to Nikkei, Sony Group will build a semiconductor factory in Thailand, hoping to control production costs by decentralizing its global production base and establish a supply chain that can respond to emergencies.

According to reports, Sony Semiconductor Solutions will invest approximately 10 billion yen ($70.7 million) to build a new production facility at an existing production base in central Thailand. Relevant work is currently underway, and the new factory is expected to begin operations in fiscal year 2025 (ending March 2025).

The new plant will produce an image sensor that can be used by vehicles with partially automated driving capabilities to detect pedestrians and obstacles. Once completed, the new factory will employ 2,000 people and increase Sony's production scale in Thailand by 70%.

It is reported that the front-end process of making circuits on wafers will be completed in the Japanese factory, while the new factory in Thailand will be responsible for processing the wafers into chips. The former requires a high level of professional knowledge, while the latter requires a large amount of manpower to operate machines. Therefore, operating in Thailand, where labor costs are relatively low, is conducive to reducing costs and improving competitiveness.

Currently, Sony conducts most of its front-end and back-end processes at its Japanese factory, but it plans to focus the Japanese factory on front-end processing, while the Thai operation handles the remaining work.

Previously, due to the new crown epidemic, global semiconductor supply was interrupted, and the production of electronic equipment and automobiles was affected. As the international division of semiconductor production deepens, Sony hopes to create a system that will enable it to continue supplying products to customers even in the event of a disaster or the spread of an infectious disease. At the same time, major semiconductor manufacturers such as Intel are also stepping up efforts to disperse their production bases.

While demand for semiconductors for personal computers and smartphones is declining, demand for automotive semiconductors has been growing as driver assistance and autonomous driving technologies gain popularity around the world. The CMOS image sensor market is expected to grow to $26.9 billion in 2026, an increase of 30% from 2021. Sony is the world's largest maker of imaging sensors, with about half the market share.