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Toyota Joins Sony and Denso in Funding TSMC’s New Chip Plant in Japan

Investment aims to boost domestic semiconductor production, targeting advanced 6-nanometer chips by 2027
Japan
Taiwan
t 2330.TW t 7203.TSE Blue Chip 150 Tech 350 Semicon 75
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Toyota Motor is set to invest in Taiwan Semiconductor Manufacturing Co.’s (TSMC) Japanese subsidiary, Japan Advanced Semiconductor Manufacturing (JASM), to support the construction of a second semiconductor plant in Kumamoto, Japan. This move, announced on Tuesday, sees Toyota collaborating with existing investors Sony and Denso, aiming to bolster Japan’s semiconductor production capabilities. Despite TSMC retaining an 86.5% stake in JASM, the partnership highlights a significant commitment from Sony, Denso, and now Toyota, with respective stakes of 6.0%, 5.5%, and 2.0%.

The initiative marks a pivotal moment for Japan, which has seen its position in the global semiconductor manufacturing sector wane over the decades. Currently, Japan’s domestic production is estimated to hover around the 40-nanometer level, a far cry from the cutting-edge capabilities needed in today’s tech-driven industries. The Japanese government has identified the revitalization of the semiconductor industry as a critical policy objective, offering substantial financial incentives and support to achieve this goal.

TSMC’s expansion in Kumamoto, underscored by the construction of its second fab expected to be operational by the end of 2027, is poised to significantly enhance Japan’s semiconductor landscape. With an investment surpassing $20 billion, the project enjoys robust backing from the Japanese government and is set to produce 6-nanometer chips, a technological leap forward for the domestic industry.

Toyota’s investment in JASM is driven by a strategic imperative to secure a reliable supply of advanced semiconductors, crucial for the development of electric and autonomous vehicles. As the automotive industry increasingly integrates sophisticated technology into its products, access to high-quality semiconductors has become a linchpin for innovation and competitiveness.

This collaboration among TSMC, Toyota, Sony, and Denso not only signifies a concerted effort to rejuvenate Japan’s semiconductor capabilities but also reflects the broader industry trend of deepening ties between automobile manufacturers and the tech sector. Through this partnership, Toyota and its fellow investors are positioning themselves at the forefront of technological advancements, ensuring access to the essential components needed to drive the future of mobility.

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