Taiwan Semiconductor Manufacturing Company (TSMC) announced on 6 February it will be building a second Japanese plant to begin operation by the end of 2027.
TSMC’s new plant brings a total investment in its Japan venture to more than US$20 billion with the support of the Tokyo government. The Taiwanese chip titan announced plans in 2021 to build a US$7 billion chip plant in Kumamoto in southern Japan’s Kyushu.
The company said the first Japanese factory would open in February 2024 with volume production in the Q4 2024. TSMC was also exploring building a second factory in the country.
In a statement, TSMC said its majority-owned unit Japan Advanced Semiconductor Manufacturing in Kumamoto would build a second fabrication plant, or fab, in response to rising customer demand. TSMC added the second fab will begin construction by the end 2024. With both factories, the site is expected to have total monthly capacity of more than 100,000 12-inch wafers to be used for automotive, industrial, consumer and high performance computing-related applications.
The capacity plan may be further adjusted based upon customer demand, it noted. TSMC is a major supplier to companies including Apple and Nvidia, holds an 86.5% stake in the Japanese venture, with Sony Group 6%, auto parts maker Denso 5.5% and carmaker Toyota with 2%.
TSMC’s expansion in Kyushu is central to the Japanese government’s efforts to rebuild the country’s position as a leading chip manufacturing centre and ensure the stable supply of chips amid trade tensions between the United States and China. The decision to build a second fab is a vote of confidence by TSMC in Japan where construction of the first fab has run smoothly and which, it sees as a source of diligent workers with a government that is easy to deal with.
Japan’s chip-making sector, the world’s biggest in the 1980s, struggled to maintain its competitive edge, going into a steady decline in the past three decades, while rivals such as Taiwanese manufacturers gained ground. While both TSMC and the Taiwan government said the majority of the company’s most advanced manufacturing would continue to take place in Taiwan, TSMC has been expanding its global manufacturing footprint in response to what it says is customer demand.
TSMC’s flagship overseas investment is a US$40 billion project to build two fabs in Arizona, supporting Washington’s plans to boost U.S. chipmaking capacity. TSMC is also planning its first European factory, in Germany, which will mainly serve the auto industry.
TSMC’s Taipei-listed stock has risen 8.9% so far this year on the back of a boom in demand for chips for artificial intelligence applications, outperforming a 0.9% gain for the broader index.
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