Japanese automaker Toyota will join a project led by Taiwan Semiconductor Manufacturing (TSMC) to expand chip production capacity in Japan's southern Kumamoto prefecture, aiming to ensure stable supply of critical parts in car manufacturing processes.
Toyota said on 6 February that it has secured around 2pc stake in TSMC's subsidiary Japan Advanced Semiconductor Manufacturing (JASM) for an undisclosed sum. Other existing Japanese shareholders Sony Semiconductor Solutions and Denso have also increased their investment, resulting in stakes of 86.5pc for TSMC, 6pc for Sony, 5.5pc for Denso and 2pc for Toyota in JASM.
JASM is planning to build a second chip fabrication plant in Kumamoto, targeting commissioning by the end of 2027. The first plant is scheduled to begin operations by the end of this year. The overall capital cost is now likely to exceed $20bn, with stronger support from the Japanese government, the companies said.
Japan's trade and industry ministry Meti has agreed to provide up to ¥476bn ($3.2bn) of subsidies to build the first plant in Kumamoto.
The expansion will increase total output capacity at JASM's Kumamoto site to more than 100,000 (12-inch) wafers/month. It will use 40, 22/28, 12/16 and 6/7 nanometer process technologies, which can produce semiconductors for the automotive and industrial sectors as well as consumer electronics and high-performance computing-related applications.
Japan's car manufacturers had faced challenges in growing sales during the Covid-19 pandemic because of auto part shortages. But the country's automobile production exceeded 8mn units for the first time in four years in 2023, hitting around 8.5mn units, thanks to a gradual recovery in chip supplies.
