TSMC may jointly build a factory with Sony, with a total investment of more than 1 trillion yen

According to Japanese media reports, under the leadership of the Ministry of Economy, Trade and Industry of Japan, TSMC may build a front-end engineering factory in Japan with Sony, with a total investment of more than 1 trillion yen, but whether the plan can be implemented depends on whether the Japanese government increases investment.

According to reports, the joint venture will be led by TSMC, and Japanese companies other than Sony may also make partial investments. The front-end engineering factory will be located near Sony's current image sensor factory in Kikuyo-cho, Kumamoto Prefecture. It is estimated that chip products for automobiles, industrial machinery, home appliances, etc. will be produced. In the future, back-end engineering factories such as packaging will also be established in the area.

In response to the rumor, a Sony official replied to Reuters, "We will not comment on speculation." TSMC did not immediately respond to the media.

TSMC targets cars

The shortage of automotive chips is a hot topic at present, and automotive chips will also have a huge market in the future. TSMC seems to be full of confidence in automotive chips.

U.S. Commerce Secretary Raymondo held a video conference on the 20th to discuss chip shortages with U.S. auto industry leaders and other semiconductor industry executives. TSMC was also invited to attend the meeting and issued a statement after the meeting, saying that it has taken unprecedented actions to support the global automotive industry, and this year's MCU production has increased by 60% compared to last year to solve the current chip shortage problem.

As the world's largest automotive MCU company, the sudden fire caused Renesas to suffer serious losses and cast a shadow on the global automotive market. According to previous foreign media reports, in order to quickly restore production capacity, Renesas has outsourced the production of some chips to TSMC.

As for Sony, today (May 26), Sony announced on its official website that it will make a strategic investment of 2 trillion yen in the three years from fiscal 2021 to fiscal 2023. The investment focus will still be on IP and direct-to-consumer projects as well as technology and stock repurchases.

If TSMC builds a factory in Japan, it will not only alleviate Sony's image sensor production capacity problem, but may also help solve the shortage of automotive chip production capacity and greatly reduce supply chain risks.

Budget is key

The key factor that determines whether the plant can be built is whether the Japanese government has sufficient funds.

Currently, the world is undergoing a new round of semiconductor money-spending competition. South Korea has invested 450 billion US dollars in 10 years, 17 EU countries have invested 145 billion euros to impact 2nm, and the United States has also recently spent 52 billion US dollars to vigorously promote the production and research of American semiconductor chips in the next five years.

There is no definite news about Japan's investment in this area, but Professor Hideki Hayashi of the Tokyo University of Science Research Institute pointed out: "Japan should invest 10 trillion yen in the semiconductor field and should work with cooperating countries to develop talent and technology."

The semiconductor department of the Japan Electronics and Information Technology Industries Association (JEITA) also made suggestions to the Ministry of Economy, Trade and Industry, saying: "It is difficult to compete on an equal footing with competitors in other countries or regions. If this situation continues, the semiconductor industry will disappear from Japan in about 10 years."

TSMC

In this semiconductor arms race, TSMC has become the biggest winner and is the target of many countries' efforts to win over. The European Union has provided tens of billions of euros in subsidies to foreign companies, hoping that Intel, TSMC and Samsung will build factories in Europe. 

The United States is also constantly contacting TSMC, inviting TSMC to participate in various semiconductor conferences, and TSMC's 5nm factory in Arizona is also progressing in an orderly manner. Earlier this month, Reuters reported that in addition to the original wafer fab, TSMC also plans to build an additional 5 wafer fabs in Arizona, that is, a total of 6 wafer fabs.

According to people familiar with the matter, this is a requirement of the US government, but the production capacity and investment plan of the additional new factories are still unclear, and it is even more unclear what process will be adopted. All of this is still in the conceptual stage.