IT Pro is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission. Learn more

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

Sumitomo Electric, a Japanese chipmaker, will produce semiconductors for 5G base stations in the US from September, aiming to serve the US and European markets.

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.

Related Resource

Business in the new economy landscape

How we coped with 2020 and looking ahead to a brighter 2021

Business in the new economyDownload 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.

Featured Resources

AI for customer service

IBM Watson Assistant solves customer problems the first time

View now

Solve cyber resilience challenges with storage solutions

Fundamental capabilities of cyber-resilient IT infrastructure

Free Download

IBM FlashSystem 5000 and 5200 for mid-market enterprises

Manage rapid data growth within limited IT budgets

Free download

Leverage automated APM to accelerate CI/CD and boost application performance

Constant change to meet fast-evolving application functionality

Free Download

Recommended

US federal agency breached by Iranian state-backed hackers via Log4Shell exploit
Security

US federal agency breached by Iranian state-backed hackers via Log4Shell exploit

17 Nov 2022
TSMC set to invest further $12 billion into Arizona fab
components

TSMC set to invest further $12 billion into Arizona fab

10 Nov 2022
Papa John's faces class-action lawsuit for alleged misuse of session tracking scripts
privacy

Papa John's faces class-action lawsuit for alleged misuse of session tracking scripts

7 Oct 2022
CISA issues fresh orders to polish security vulnerability detection in federal agencies
Security

CISA issues fresh orders to polish security vulnerability detection in federal agencies

6 Oct 2022

Most Popular

How to boot Windows 11 in Safe Mode
Microsoft Windows

How to boot Windows 11 in Safe Mode

15 Nov 2022
The top 12 password-cracking techniques used by hackers
Security

The top 12 password-cracking techniques used by hackers

14 Nov 2022
Windows users now able to run Linux apps and distros natively
Microsoft Windows

Windows users now able to run Linux apps and distros natively

24 Nov 2022