Sony and TSMC could team up to tackle global chip shortages

Global chip shortages may soon create unexpected allies in Japan. As Reuters reports, Nikkei Sources say Sony and TSMC are “considering” the joint establishment of a semiconductor factory in Kumamoto Prefecture, western Japan. TSMC would have majority control, insiders say, but the plant would operate on Sony’s land near that company’s image sensor plant. The Japanese government would cover up to half of the $ 7 billion investment.

The factory would supply chips for cameras, cars and other purposes. As a result, auto parts giant Denso is said to be interested in the project. If the project goes ahead, the plant will be operational by 2024. Sony and TSMC declined to comment, although TSMC has previously said it is “actively reviewing” plans for an effort like this.

A common factory would not be surprising. Some analysts expect the global chip shortage to last until 2023, and that assumes demand isn’t growing faster than expected. This would help Sony, TSMC and the entire Japanese tech industry to recover from the shortage, not to mention greater stability. It could also serve as a cover – Japan, Sony and TSMC wouldn’t have to worry about Sino-U.S. Tensions threatening production in Taiwan.

The factory could be ready at the right time. Highly connected and semi-autonomous cars are expected to be more common by 2024, and it’s no secret that cameras play a crucial role even in budget smartphones. A new factory could be crucial in keeping these technologies on track.