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TSMC is partnering with Sony on its new $7 billion chip factory in Japan

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The new fab won’t start production until the end of 2024

The TSMC (Taiwan Semiconductor Manufacturing Company) logo... Photo by Walid Berrazeg/SOPA Images/LightRocket via Getty Images

TSMC is teaming up with Sony (specifically, Sony Semiconductor Solutions Corporation) on its new $7 billion chip factory in Japan, the companies jointly announced today. The new plant, as had been previously announced, will focus not on cutting edge chips but rather older 22nm and 28nm processes in an effort to meet supply shortfalls for older chips have has steadily impacted everything from cars to smartphones.

The new factory had previously been announced last month by TSMC CEO C.C. Wei, although at the time, it had yet to be approved by TSMC’s board of directors. Nikkei reports that the board has now approved the new factory under a new subsidiary, Japan Advanced Semiconductor Manufacturing, Inc. (JASM). Sony’s semiconductor group will invest approximately $0.5 billion in the new subsidiary for less than 20 percent equity in JASM.

For those hoping that the new Japan factory will help ease supply constraints on older chips, it’ll still be some time before the new factory comes online. Construction on the new fab won’t begin until 2022, with production not set to start until “the end of 2024.”

The Nikkei report also notes that TSMC’s board also approved plans to build a new fab in Taiwan that would focus on both advanced 7nm chips, as well as legacy 28nm products, although construction isn’t set to begin until 2024.

The new expansions are part of TSMC’s ambitious plans to invest $100 billion through 2023 to build out its chipmaking capabilities even further. TSMC still builds the bulk of its chips in Taiwan, outside of a pair of fabs in China and a small subsidiary (WaferTech) located in Washington state. The new $7 billion Japan fab, along with the already planned $12 billion manufacturing hub in Arizona, would help to expand TSMC’s reach to new countries, even as the new Taiwan facility continues to shore up its domestic capacity.