Japanese outlets said on Friday that tech conglomerate Sony is considering establishing a semiconductor production plant in Kumamoto Prefecture, southwest of Japan.

NHK news outlet reported that Sony aims to expand the manufacturing capacity of chips used in smartphone cameras and a large capital investment will be needed to initiate this project.

Sony dominates the market of sensors for smartphones at 40% share, including sensors used by Apple for the iPhone camera.

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The factory, which is expected to be operational after 2026, will require a few billion dollars in capital the media added.

The Japanese electronics giant is also expected to build a new chip manufacturing plant in partnership with Taiwan's chip giant TSMC in Kikuyo.

Read more: Sony to launch firm to explore making electric cars

It's noteworthy that US President Joe Biden signed legislation in August providing $52 billion in subsidies for domestic semiconductor manufacture.

The semiconductor industry has gained increased geopolitical prominence as China accused the US bill of threatening global supply chains and hampering international trade.

Global shortages of computer chips, prompted by the coronavirus pandemic and the conflict in Ukraine, have caused production delays on a global scale for technology companies and other manufacturers.

Infograph: Netherlands in the middle of the US-Chinese chip war

Tech companies have been racing to diversify production locations and capacities amid the global struggle between powers, mainly China and the US, to gain tech superiority and establish world dominance in the industry.