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Semiconductors

TSMC lifts Japan chip plant investment, with Denso following Sony

Additional funding will help pay for 12-to-16-nm semiconductor line

Auto parts maker Denso is expected to contribute tens of billions of yen to the construction of TSMC's new plant in Kumamoto Prefecture in Japan. (Source photos by Kai Fujii, Reuters and Kyodo) 

TOKYO -- Taiwan Semiconductor Manufacturing Co. will increase its investment in a project that will see the construction of the company's first plant in Japan, as auto parts maker Denso joins in the project along with Sony Group, the three companies announced Tuesday. The announcement confirms Nikkei's earlier report.

The chip plant will be built in Kumamoto, in southern Japan. It will be undertaken by a joint venture called Japan Advanced Semiconductor Manufacturing or JASM, which will be majority-owned by TSMC.

The three companies said Denso will provide $350 million in equity for JASM, taking a stake of over 10%.

The expected increase in funding will help TSMC to build a production line for 12-to-16-nm chips in Kumamoto, in addition to the 22-to-28-nm chip production line envisaged in the original plan.

"JASM is not only an opportunity for TSMC to support growing market demand for specialty technologies, it enables us to leverage Japan's top-notch semiconductor talent and contribute to the growth of the global semiconductor ecosystem," C.C. Wei, TSMC's chief executive, said in a joint statement.

The project was originally estimated to cost 800 billion yen ($7 billion), but the three companies say the project will be now worth $8.6 billion. Construction is scheduled to begin this year, with production to start by the end of 2024.

The project was unveiled in November and is expected to produce semiconductors, including chips used in image sensors, a key product for Sony. Sony intends to provide 57 billion yen, or about $500 million, in capital for the project over the next two years, acquiring a stake in JASM of less than 20%.

The Kumamoto plant will turn out logic chips, which serve as main processors in computers. Chips in the 10-nm class are necessary to handle the complex data generated by autonomous vehicles and advanced driver-assistance systems designed to prevent collisions. With its contribution, Denso aims to secure a stable source of the advanced chips needed for autonomous vehicles.

"Semiconductors are becoming increasingly important in the automotive industry as mobility technologies evolve, including automated driving and electrification," Koji Arima, president and CEO of Denso, said in the statement. "Through this partnership, we contribute to the stable supply of semiconductors over the medium to long term, and thus to the automotive industry."

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