The Nikkei reported on Friday that Taiwan's TSMC and Japan's Sony Group are contemplating partnering to establish a chip plant in Japan, with the government willing to fund a portion of the estimated JPY 800 billion ($7.15 billion) investment.
According to the article, the facility in Kumamoto, southern Japan, is planned to start producing semiconductors for vehicles, camera image sensors, and other goods that have been affected by a global chip shortage by 2024. Denso, Japan's largest car parts manufacturer, is also interested in becoming involved, according to the article, by building up equipment on the site.
The member of the Toyota Motor Group is looking for reliable chip supply for its car parts. Denso was not immediately available for comment, while Sony and TSMC declined to comment. In July, TSMC, the world's largest contract chipmaker and a major Apple supplier, announced it was evaluating a plan to set up manufacturing in Japan.
The concentration of chipmaking capabilities in Taiwan, which manufactures the bulk of the world's most sophisticated processors, has been a source of concern for TSMC. China has not ruled out the possibility of force to seize control of the democratic island. With a worldwide chip scarcity prompting automakers to curtail output, Japanese officials are likewise concerned about the supply chain stability of their sectors.