TSMC and Sony officially create partnership to build $7 billion fab in Japan

The new fab is expected to start producing chips with the 22 and 28nm processes by 2024.

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Taiwan Semiconductor Manufacturing Company (TSMC) and Sony announced on Tuesday that they officially entered into a joint venture to build a new $7 billion fab in Japan, with the goal of mass-producing chips in that facility by 2024.

TSMC CEO CC Wei had already announced the new fab was in development last month, but it was yet to receive board approval until Tuesday. Rather than focus on building cutting edge chips, the new fab will primarily build chips with 22 and 28nm processes to help ease the current global chip shortage.

The new fab will be operated under a new joint venture between TSMC and Sony, called Japan Advanced Semiconductor Manufacturing (JASM), with mass production scheduled to begin by the end of 2024.

Sony will invest $500 million into the joint venture, which will give it no more than a 20% equity stake, with the remainder to be funded by TSMC.

"While the global semiconductor shortage is expected to be prolonged, we expect partnership with TSMC to contribute to securing a stable supply of logic wafers, not only for us but also for the overall industry," Sony Semiconductor Solutions CEO and president Terushi Shimizu said.

In a separate TSMC update, the company's board of directors also announced the company would invest over $9 billion into more fab construction and upgrading technology capacity, with that amount being separate from the money that will be used to invest into JASM. According to Nikkei, part of these funds will be put towards developing another domestic chipmaking facility in Kaohsiung. That fab will reportedly make cutting-edge 7nm chips, as well as less advanced 28nm chips.

Earlier this year, Wei said the company has been increasing output for simpler chips used in the automotive industry, with the company expecting its production of these chips to be 60% higher than 2020 levels and 30% higher than 2018 pre-pandemic levels by year-end.

The company has also announced plans to spend $100 billion over three years to boost capacity.

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