Sony to build in Thailand a back-end factory serving image sensors for cars

Tech giant to hire 2,000 workers as it looks to cut costs, avoid disruptions

Sony is preparing to move the labor-intensive work of processing wafers into thin chips out of Japan and to Thailand

Sony will set up a semiconductor plant in Thailand as it seeks to curb production costs and build a supply chain resilient to emergencies by more widely dispersing its global production bases, Nikkei has learned.

Sony Semiconductor Solutions will invest approximately 10 billion yen ($70.7 million) in the construction of a new building on the premises of a production base in central Thailand. Work is already underway, and the plant will begin operating in the fiscal year ending March 2025.

The new facility will make a type of image sensor that partly automated cars use to identify pedestrians and obstacles. Once built, Sony’s scale of production in Thailand will increase by 70%. The company will hire 2,000 employees to work the plant.

The front-end process of creating circuits on wafers, a key component of semiconductors, will be completed in Japan. The plant in Thailand will conduct back-end processing of the wafers into thin chips, which will then be covered in resin.

The finished products will be exported globally.

While the former process requires a high level of expertise, the latter requires a lot of manpower to operate the machines. Keeping labor costs down is a key factor in achieving competitiveness, so operating in Thailand, where labor costs are relatively low, will be beneficial.

Sony currently handles most of the front- and back-end processes for automotive sensors at its plants in Japan. It now plans to focus its Japan efforts on front-end processing and let its Thai operations take over the rest.

The global supply of semiconductors was disrupted early on by the coronavirus pandemic, which curtailed the production of electronic devices and cars. With an international division of labor in semiconductor production, Sony seeks to create a system that will allow it to continuously supply products to customers even in the event of a disaster or the spread of an infectious disease.

Major semiconductor makers like Intel are also hurrying to decentralize their production bases.

While demand for semiconductors used in PCs and smartphones is on the decline, inquiries for those used in automobiles have been strong amid the accelerating digitization of vehicles as the world moves closer to adopting driving assistance technologies and automated driving.

The CMOS image sensor market is expected to reach $26.9 billion by 2026, a 30% increase compared to 2021. Sony is the world’s top maker of imaging sensors, controlling about half of the market.