Taiwan’s TSMC and Japan’s Sony Group are considering jointly creating a chip factory in The japanese, with the government ready to purchase some of the investment of about JPY 800 billion ($7. 15 billion or Rs. 53, 600 crores), the Nikkei reported on Friday.

The plant in Kumamoto, southern Japan, is expected to produce semiconductors for automobiles, camera image sensors and other products which have been hit by a global chip shortage, and is likely to start operations simply by 2024, the report stated.

Japan’s best auto parts maker Denso is also looking to participate by means of such steps as setting up equipment at the site, the particular report said. The Toyota Motor group member seeks stable supplies of potato chips used in its auto components.

Both Sony and TSMC declined to comment, while Denso had not been immediately available to comment. TSMC, the world’s largest contract chipmaker and major Apple company supplier had said within July that it was reviewing a strategy to set up production in Japan.

TSMC continues to be concerned about the concentration of chipmaking capability in Taiwan, which produces the majority of the tour’s most advanced chips. China does not rule out the use of force to bring the democratic island below its control.

Japanese officials are also concerned about the supply chain stability of its industries, with a global chip shortage forcing automakers to cut production.

© Thomson Reuters 2021

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TSMC, Sony Said to Be Considering Joint Chip Factory With Japan’s Help