Toyota, Sony Set Japanese Chip Business --- Companies target creation of next- generation products By The Late 2020s

"TOKYO -- Toyota Motor Corp. and Sony Group Corp., together with six other Japanese companies, are creating a business to design and make next-generation semiconductors from the late 2020s.

The venture, called Rapidus, comes amid rising competition among major economies for advanced chips to support applications like artificial intelligence and quantum computing.

Toyota, Sony and the chip companies -- Kioxia Holdings Corp. and Tokyo Electron Ltd., as well as SoftBank Group Corp. -- have each contributed about 1 billion yen, around $7 million, to create the venture, the Japanese government said Friday.

A research center for the new business will be set up this year, the government said.

"As the struggle for control of technology between the U.S. and China intensifies, the importance of semiconductors is increasing from the perspective of economic security," Economy Minister Yasutoshi Nishimura said.

Japan, once a global leader in semiconductor manufacturing, has fallen far behind the U.S. and Taiwan.

Tokyo sees that as a national-security concern as well as a problem for local manufacturers, especially car makers that increasingly rely on advanced chip technologies to support features such as autonomous driving.

Industry analysts say global chip shortages are likely to continue through the better part of the decade because of competition for leading-edge semiconductors across many industries.

Major economies like the U.S. and China are all pouring in government money to enhance domestic chip production.

For Toyota, Sony and others, the new business is aimed at helping to diversify and strengthen chip supply chains.

Companies globally have been grappling with a shortage of semiconductors since late 2020, when stay-at-home demand for electronics clashed with an abrupt rebound in demand for cars.

This month, Toyota trimmed its annual production target for cars by 500,000 vehicles, citing the risk of semiconductor shortages. Nissan Motor Co. and Honda Motor Co. also cut their sales forecasts for the fiscal year ending March.

More recently, the U.S.-China clash over chips has further heightened concerns from companies about whether or not they will be able to secure stable supplies.

For Toyota, in particular, the investment is a way for it to become more involved in its chip supply chain, working directly on processes like circuit design that have, in the past, typically been handled by semiconductor companies. A spokeswoman for Toyota said the company invested in Rapidus to "support future in-vehicle needs."" [1]

1. Toyota, Sony Set Japanese Chip Business --- Companies target creation of next- generation products By The Late 2020s
Yang, Jie; Davis, River. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 11 Nov 2022: B.4.