Toyota and Sony establish advanced chip business in Japan

TOKYO – Toyota Motor Corp. and Sony Group Corp. form a new company with six other Japanese companies to develop and manufacture next-generation semiconductors by the late 2020s.

Named Rapidus, Latin for “quick,” the company is emerging amid increasing competition among major economies for advanced chips to support applications such as artificial intelligence and quantum computing.

Toyota, Sony and chip companies Kioxia Holdings Corp. and Tokyo Electron GmbH.

and SoftBank Group corp

each contributed about one billion yen, about $7 million, to the establishment of the company, the Japanese government said on Friday.

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

Sony, Toyota and the other six companies use Rapidus to diversify and strengthen Japan’s chip supply chains.


Photo:

Akio Kon/Bloomberg News

“As the battle for control of the technology between the US and China intensifies, the importance of semiconductors from an economic security perspective is increasing,” Economy Minister Yasutoshi Nishimura said.

Japan, once the world leader in semiconductor manufacturing, has fallen far behind the US and Taiwan. Tokyo views this as a national security concern, as well as a problem for local manufacturers, particularly automakers, who are increasingly turning to advanced chip technologies to support features like autonomous driving.

Industry analysts say global chip shortages are likely to last through most of the decade due to competition for cutting-edge semiconductors in many industries.

Big economies like the US and China are all pouring out government money to boost domestic chip production.

For Toyota, Sony and others, the new deal aims to help diversify and strengthen their chip supply chains. Businesses worldwide have been grappling with semiconductor shortages since late 2020, when household demand for electronics collided with an abrupt recovery in demand for cars.

Earlier this month, Toyota cut its annual car production target by 500,000 vehicles, citing the risk of continued semiconductor shortages. Nissan engine co

and Honda engine co

also lowered their sales forecasts for the fiscal year ended March.

More recently, the US-China dispute over chips has further fueled concerns among companies about their ability to secure stable supplies.

For Toyota in particular, the investment is a way to get more involved in its chip supply chain and work directly on processes like circuit design that historically were typically performed by semiconductor companies. Toyota declined to comment.

—Chieko Tsuneoka contributed to this article.

Write to Yang Jie at [email protected] and to River Davis at [email protected]

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