TSMC to Build Second Chip Factory in Japan: A Boost for Semiconductor Manufacturing

TSMC to Build Second Chip Factory in Japan
Image credit: TSMC

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, has announced its ambitious plan to construct a second fabrication plant (fab) in Japan. This move comes as a response to rising customer demand and aims to bolster Japan’s position as a leading chip manufacturing center.

  • Investment: TSMC’s total investment in its Japan venture will exceed $20 billion.
  • Location: The new fab will be located in Kumamoto, in southern Japan’s Kyushu region.
  • Timeline: Construction of the second fab is set to begin by the end of this year, with operations expected to commence by the close of 2027.
  • Capacity: When both factories are operational, the site will have a total monthly capacity of more than 100,000 12-inch wafers. These wafers will be used for various applications, including automotive, industrial, consumer, and high-performance computing.
  • Ownership: TSMC holds an 86.5% stake in the Japanese venture, with other stakeholders including Sony Group (6%), auto parts maker Denso (5.5%), and carmaker Toyota (2%).

Why Japan?

TSMC’s expansion in Kyushu aligns with the Japanese government’s efforts to revitalize its chip-making sector. Japan, once a dominant force in semiconductor manufacturing during the 1980s, has faced challenges in maintaining its competitive edge. Meanwhile, Taiwanese manufacturers have made significant strides.

The decision to build a second fab is a vote of confidence by TSMC in Japan. The construction of the first fab has proceeded smoothly, and Japan is seen as a source of diligent workers with a government that is easy to work with.

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