Japan is currently witnessing progress in two expansive semiconductor plant construction projects, both with the potential to affect the trajectory of the national economy. The projects have captured widespread attention due to their potential to breathe new life into local communities and, by extension, stimulate the Japanese economy.
Kumamoto: Sony's Image Sensor Plant
In Kumamoto Prefecture, Sony Corp. is building a new plant to produce image sensors, which are used in smartphones, cameras, and other devices. The plant, which is expected to start operations in April 2024, will be Sony's largest image sensor production facility in Japan, with a total floor area of about 100,000 square meters. The project is expected to create about 1,000 new jobs and generate annual sales of about 200 billion yen.
Sony's image sensor business is one of its most profitable segments, accounting for about 30% of its operating profit in fiscal 2022.
Hokkaido: TSMC's Chip Foundry
In Hokkaido, Taiwan Semiconductor Manufacturing Co., or TSMC, the world's largest contract chipmaker, is planning to build a chip foundry, or a plant that manufactures chips for other companies. The foundry, which will be TSMC's first in Japan, will produce 28-nanometer chips, which are mainly used for automotive and industrial applications. The project is expected to cost about 800 billion yen and create about 1,600 new jobs
TSMC's decision to build a foundry in Japan is seen as a strategic move to diversify its production base and reduce its reliance on Taiwan, which faces geopolitical risks and water shortages.
Japan's Semiconductor Strategy
The two semiconductor projects in Japan are in line with the country's three-stage strategy to revive its semiconductor industry over the next 10 years. The strategy, proposed by the Ministry of Economy, Trade, and Industry, aims to enhance Japan's competitiveness and self-reliance in the semiconductor sector, which is vital for national security and economic growth.
The strategy consists of three phases: the first phase focuses on securing a stable supply of chips and materials, the second phase aims to develop cutting-edge technologies and products, and the third phase targets to establish a global leadership position in the semiconductor market.
The strategy also involves cooperation with other countries, such as the United States and the European Union, to create a resilient and diversified supply chain and to counter the rise of China, which is aggressively investing in its semiconductor industry.
The semiconductor projects in Japan are expected to whip up local optimism and national confidence, as well as to contribute to the global semiconductor ecosystem. Japan hopes to regain its glory as a semiconductor powerhouse and to play a key role in the digital transformation of the world.
Tech Alliance edit team