Japan is set to enlist the world’s biggest contract chipmaker Taiwan Semiconductor Manufacturing Co (NYSE: TSM) in a joint public-private partnership to develop cutting-edge chipmaking technologies, the Nikkei Asia reported on Monday.
What Happened: TSMC aims to bear about $337 million (or 37 billion yen) — around half of the project’s cost — and over 20 Japanese companies, including Ibiden, Asahi Kasei, Shin-Etsu Chemical, Shibaura Mechatronics, will participate in the program, as per the Nikkei.
The move purportedly comes as part of the Japanese government’s plan to elevate the Japanese semiconductor industry’s declining position in the global market.
The joint venture will begin construction of a trial facility this summer at the National Institute of Advanced Industrial Science and Technology, in Tsukuba, Ibaraki Prefecture.
Research and development work is expected to begin as early as 2022, the report noted, adding that Japan is likely cooperating with TSMC on the condition that the latter sets up a manufacturing operation in the country.
See Also: Apple Supplier TSMC On How Repeat Of Crippling Chip Shortage Can Be Avoided In Future
Why It Matters: The Taiwanese semiconductor company, a key Apple Inc (NASDAQ: AAPL) supplier, is looking to make the more powerful and sophisticated chips of tomorrow and seeking to use the expertise of Japanese companies in materials and manufacturing equipment.
Semiconductors can have ever greater processing power in some crucial areas where the chip industry is nearing limits such as the thinning of wires and where Japanese companies have an edge, the Nikkei noted.
A condition stipulating that TSMC establishes a manufacturing facility in the country could reportedly be a part of the cooperation agreement.
Price Action: TSMC shares closed 1.4% higher at $117.36 on Friday.
Read Next: Chip Shortage Will Have ‘Severe Impact’ On 93% Of Auto Industry
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