Sumitomo to double capacity with US production

05 July 2021 | Melanie Mingas

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Sumitomo Electric Industries will manufacture semiconductors for 5G base stations in New Jersey, US, from September.

According to reports by Nikkei Asia, the Japanese chipmaker said the production shift is needed due to growing concerns over supply chain disruption as a global shortage of chips continues. Sumitomo said it plans to use the facility to double supply capacity.

It has set up a transistor production facility in a factory in New Jersey, operated by II-VI, following an investment reported to be worth "several billion yen". The products will be supplied to the European and US markets.

Sumitomo holds a 70% share of the product globally and supplies Huawei Technologies, among others.

In February, US President Joe Biden pledged $37 billion in funding to boost manufacturing of critical sectors and supply chains, including semiconductors. In May, US commerce secretary, Gina Raimondo, met leaders from the semiconductor industry to discuss the global shortage of chips and the effect on industry.

TSMC and Samsung have both announced intentions to invest in the US, while in the UK over the weekend, ARM CEO Simon Segars published a blog post stating that ARM's merger with Nvidia would be more beneficial than it pursuing an IPO.

In a blog post, he wrote: “We contemplated an IPO but determined that the pressure to deliver short-term revenue growth and profitability would suffocate our ability to invest, expand, move fast and innovate. Combining with NVIDIA will give us the scale, resources and agility needed to maximize the opportunities ahead. This deal is the best opportunity for Arm and our customers and will enable the UK to be a meaningful industry player in the age of AI."

His post came a week after Qualcomm said it would invest in an initial public offering from ARM, should the proposed merger not proceed.