Japanese automaker Denso Corp. will take a minority stake in Japan Advanced Semiconductor Manufacturing Inc. (JASM), a subsidiary semiconductor manufacturing fab of Taiwan Semiconductor Manufacturing Co. (TSMC) and Sony Semiconductor Solutions Corp (SSS).
The $350 million investment will give Denso more than 10% equity stake in JASM.
TSMC announced it was building the JASM fab late last year, spending about $7 billion with further support coming from the Japanese government. SSS was taking a minority stake in the subsidiary with an investment of $500 million and a 20% equity stake.
Construction of JASM is slated to begin this year with production targeted by the end of 2024. TSMC will use 12/16 nanometer FinFET process technology in JASM as well as a 22/28 nm process line. Monthly production capacity at JASM is expected to be about 55,000 12 inch (300 mm) wafers.
For Sony, the investment in the fab means it will receive a stable supply of logic wafers. This is important given the ongoing chip shortage that is impacting the supply chain and causing many industries to push back production of devices and vehicles.
Denso has similar ideas in mind with the partnership helping to create a stable supply of semiconductors over the medium and long term for its vehicles. The automotive sector has been hit especially hard by the chip shortage with many automakers having to adjust production schedules and revenues as a result.
Growing fab capacity
The chip shortage is expected to last the entirety of 2022 with potential for bleeding into 2023 if the situation is not improved. Many companies including TSMC, Samsung, Intel and GlobalFoundries are increasing fab capacity as well as starting construction on new fabs or announcing new planned fabs to meet current demand for chips as well as the expected 5% growth in semiconductors over the next decade, according to the Semiconductor Industry Association (SIA).
An ongoing trend in the market is seeing companies partnering with semiconductor manufacturers to secure supply in the event the chip shortage continues and to protect against future issues if another pandemic crops up or geopolitical issues cause disarray.
Additionally, governments are calling on renewed investment in semiconductor manufacturing due to these potential issues after seeing the impact COVID-19 had on the supply chain and it being the root cause of the chip shortage.
This includes the American government with its Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act that would give some $52 billion in incentives for growing domestic chip manufacturing. And more recently the European Chips Act, which is a similar effort for growing European chip making prowess.