TSMC fab in Japan at center of Sony's image sensor kingdom

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Supply chain with locally produced chips key to boosting output

asia.nikkei.com, Dec. 17, 2022 – 

TOKYO/KUMAMOTO, Japan -- Sony Group will seize the opportunity created by a planned Taiwan Semiconductor Manufacturing Co. foundry in Japan by setting up an image sensory plant nearby.

Image sensors, used in smartphones and other devices, use logic chips as a key component. By opening a plant that sources the semiconductors from the local TSMC foundry in Kyushu, Sony can build its own supply chain and boost production as competition heats up with Samsung and other rivals.

Sony commanded 44% of the CMOS image sensor market by value in 2021, according to U.K. research company Omdia. But unlike Samsung Electronics, which held an 18% market share last year, the Japanese electronics company lacks in-house capabilities to produce cutting-edge logic chips.

For Sony to achieve its goal of a 60% market share by fiscal 2025, the ability to locally source logic chips from TSMC to ramp up production is critical.

Kikuyo, in Kumamoto prefecture, where TSMC is building its foundry, had been a sleepy town known for sprawling carrot farms. Now, roads are clogged with trucks and other construction vehicles traveling to and from TSMC's construction site. Traffic has become so bad that "I can't tell how long it will take from point A to point B during the morning rush hours," said a local taxi driver.

The prefecture is home to a Sony Semiconductor Solutions plant as well as a regional unit of chipmaking device giant Tokyo Electron, among others. Offering vast land and ample groundwater, Kumamoto holds promise place as a place that can nurture a chip industry.

The prefecture has high expectations for TSMC and Sony to boost the local economy by bringing in workers. TSMC's new plant is expected to boost Kumamoto's economy by about 4.3 trillion yen ($31.5 billion) over the next 10 years, according to Kyushu Financial Group.

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