Sony (SONY) is exploring the possibility of teaming up with Taiwan Semiconductor Manufacturing Co. (TSM) to construct a new semiconductor factory in Western Japan. The project is estimated to cost $7 billion, with the Japanese government expected to provide half of the amount. Citing people familiar with the matter, NIKKEIAsia reports that the factory is expected to go into operation by 2024. SONY shares rose 1.33% to close at $107.49 on October 8.

Sony designs, develops, and sells electronic equipment, devices, games, and music.

According to people familiar with the matter, the proposed factory will be set up in Kumamoto Prefecture, on land owned by Sony. The factory will specialize in the development of semiconductors for use in camera image sensors. It will also make chips for automobiles and other products. (See Top Smart Score Stocks on TipRanks)

The planned semiconductor factory seeks to address the global chip shortage that has taken a significant toll on the auto industry. Japanese auto-parts maker Denso is also looking to participate and has hinted at plans to set up equipment at the proposed site.

According to Sony CEO Kenichiro Yoshida, procuring semiconductors in-house is crucial for Japan to maintain its international competitiveness. The Japanese government will support the factory to help protect supply-chain stability. Rising tensions in Taiwan, a key supplier of chips, have also forced the government to safeguard its supplies.

Japan joins the U.S. and Europe to start producing semiconductors in-house amid national security concerns.

SONY scores a 6 out of 10 on TipRanks' Smart Score ranking system, indicating that the stock is expected to perform in line with market expectations.

Consensus among analysts is a Moderate Buy based on 1 Buy rating over the last three months.

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The post Sony and TSMC Plan $7B Chip Factory in Japan - Report appeared first on TipRanks Financial Blog.

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By: Payal Gupta
Title: Sony and TSMC Plan $7B Chip Factory in Japan - Report
Sourced From: blog.tipranks.com/sony-and-tsmc-plan-7b-chip-factory-in-japan-report/
Published Date: Mon, 11 Oct 2021 07:58:49 +0000

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