Sony set to become a major customer of TSMC’s first fab in Japan

TSMC’s first Japanese chip factory is only expected to start operating in 2023/2024, but it looks like some customers are already getting lined up to reserve some of its capacity for themselves. One such customer is Sony, which is reportedly investing $7 billion alongside TSMC to build the plant in Japan.

TSMC’s first chip plant in Japan should be placed on Sony’s property, close to the Japanese company’s image sensor factory in the Kumamoto prefecture, on the island of Kyushu in western Japan. Like Sony’s adjacent factory, TSMC’s Japanese fab is also set to produce camera image sensors, as well as chips for vehicles and other products. The factory will have an expected output of 40,000 wafers per month based on the 28nm node.

With Sony’s investment in TSMC’s first Japanese fab, the company is also expected to have a small stake in a new company created with the sole purpose of managing the chip plant. Factory operations are said to start in 2023 or 2024.

Plans for building a Japanese plant were confirmed by TSMC back in July when the semiconductor giant stated it was “actively reviewing” strategies and proposals for the project.

The plans to build the first chip plant in Japan come after the company announced it would invest $100 billion until 2024 to expand its operations, R&D and battle the ongoing chip shortage we face.

Compared to TSMC’s $12 billion investment to build a new chip factory in Arizona, $7 billion for the Japanese factory may not sound like much. However, it’s worth noting the former will be aimed at producing 5nm chips, while the latter is for 28nm ones, an older technology that is also much cheaper.