Sony and TSMC want to team up to address global chip shortages

The global chip shortage could soon create unexpected allies in Japan. Sources say Sony and TSMC are "considering" setting up a joint semiconductor manufacturing plant in Japan's western Kumamoto prefecture. According to insiders, TSMC will have a controlling stake, but the plant will operate on Sony's premises next to the company's image sensor plant. The Japanese government will reportedly cover up to half of the $7 billion investment.

The plant will supply chips for cameras, cars and other uses. Accordingly, automotive parts giant Denso is presumably interested in the project. If the project moves forward, the plant will be up and running by 2024. Sony and TSMC declined to comment, although TSMC has previously said it is "actively exploring" plans for such a project.

Some analysts expect the global chip shortage to last until 2023, and that's assuming demand does not grow faster than projected. Such co-production will help Sony, TSMC and the entire Japanese technology industry recover from the deficit, not to mention more stability. In addition, a factory in Japan would provide some reassurance - the country's authorities, Sony and TSMC would not have to worry about tensions between China and the US threatening production in Taiwan.

Source: reuters, nikkei, engadget

Illustration: KAZUHIRO NOGI/AFP via Getty Images