Japan’s Sumitomo Electric to create 5G chips in US
The company will produce semiconductors for the US and European markets as the global chip shortage continues
The company, which has over 270,000 employees in over 30 countries, plans to double its supply capacity with its US operations, according to Nikkei Asia. It reportedly holds a 70% share of this semiconductor technology while also being a key supplier to China’s Huawei.
The chipmaker has reportedly set up a production facility in a factory in New Jersey, operated by US manufacturer II-VI, with the investment said to be at “several billion yen” (1 billion yen is worth around $9 million). The factory is set to produce transistors, a core component of 5G base stations, that amplify signals.
Semiconductors produced in the US will be supplied to the US and European units of communications equipment manufacturers such as Ercisson and Nokia. Since around 90% of Sumitomo Electric’s current supply is reportedly provided to Chinese manufacturers, the company is looking to increase sales to US and European clients.
This move comes amid a global semiconductor chip shortage and falls in line with US policy, which is trying to attract chipmakers to its territory. Legislators are discussing a bill that could see $52 billion spent on boosting domestic semiconductor manufacturing in the next five years. The legislation is trying to encourage US manufacturers to out-compete countries like China in critical technologies and help the country’s economic and national security, according to Senate Majority Leader Chuck Schumer.
Business in the new economy landscape
How we coped with 2020 and looking ahead to a brighter 2021Download now
Taiwan’s TSMC is also reportedly planning to build an additional five chip plants in Arizona, with the company aiming to build six factories in the next three years. This project represents a major expansion of TSMC’s plans to shift some of its manufacturing to the US, considering that it produces most of its chips in Taiwan. It is not yet clear whether TSMC will receive any government funding to build more chip factories in Arizona, although this could still change.
B2B under quarantine
Key B2C e-commerce features B2B need to adopt to surviveDownload now
The top three IT pains of the new reality and how to solve them
Driving more resiliency with unified operations and service managementDownload now
The five essentials from your endpoint security partner
Empower your MSP business to operate efficientlyDownload now
How fashion retailers are redesigning their digital future
Fashion retail guideDownload now