Mitsubishi Electric to build ¥100 bil chip factory in Kumamoto

Mitsubishi Electric Corp. is investing roughly ¥100 billion (approximately $918 million) to construct a new semiconductor fabrication facility in Kumamoto, Japan, the company announced Monday.

The facility is projected to begin producing chips for the automotive, industrial and other markets in 2022, and will operate under the auspices of Mitsubishi Electric Semiconductor Ltd., a wholly-owned subsidiary of Mitsubishi Electric.

The new fabrication facility will target production of chips with 40-nanometer and below semiconductor process technology, a cutting-edge technology that enables high-performance, low-power devices.

Mitsubishi Electric has previously stated that it is hoping to capture a 20 percent share of the global market for such chips before the end of the decade.

The company did not disclose how many jobs the new facility would create, but said it is “looking to build a competitive semiconductor business in Kumamoto.”

The construction of the facility follows a continued trend of Japanese manufacturers investing in chip production facilities. In recent years, several other chipmakers have announced plans to set up fabrication facilities in Japan, including Renesas Electronics Corp., Sharp Corp., and Toshiba Corp.

Mitsubishi Electric’s foray into chip production is part of its multi-year effort to diversify its business and reduce its dependence on traditional sectors such as automobiles and home appliances.

The company has also established a dedicated research and development center devoted to semiconductor technology, and has invested in several chip startups in the past few years.

Mitsubishi Electric’s announcement of the ¥100 billion fabrication facility in Kumamoto marks the latest in a string of investments by Japanese chipmakers to capitalize on the growing demand for semiconductors in the automotive, industrial, and other sectors.

The facility is anticipated to be operational in 2022 and is expected to produce 40-nanometer and below chips, aiming to capture a 20 percent share of the global market before the end of the decade.

The construction of the facility is indicative of Mitsubishi Electric’s current strategy to diversify its business and reduce dependence on traditional sectors, as evidenced by its investments in semiconductor-related research and development, and its backing of several chip startups.