Sony Group (6758.T) on Tuesday said it will invest about $500 million in a joint venture with Taiwan Semiconductor Manufacturing Co's (2330.TW) (TSMC) that will build a $7 billion chip plant in Japan.
Construction of the factory, which local media last month said will supply semiconductors to Sony's image sensor business, will begin in 2022, with production slated to begin at the end of 2024, the companies said in a press release.
The decision marks a success for Japanese industry ministry officials, who want TSMC to build plants to supply chips to Japan's electronic device makers and auto companies as trade frictions between the United States and China threaten to disrupt supply chains and demand for the key component grows.
"The fab is expected to directly create about 1,500 high-tech professional jobs and to have a monthly production capacity of 45,000 12-inch wafers,' Sony and TSMC said.
The project has "strong support from the Japanese government," they added, although they did not say whether that included financial backing.
Amid growing tension with mainland China, TSMC has become concerned about the concentration of chipmaking in Taiwan, which produces most of the world's advanced semiconductors.