TSMC Plans To Build Another Chip Factory In Japan

(CTN News) – On Tuesday, Taiwanese chipmaker TSMC (2330.TW) announced it would build a second Japanese plant for operation by 2027, totaling more than $20 billion in investment.

The Taiwan Semiconductor Manufacturing Co. announced plans in 2021 to build a $7 billion chip plant in Kumamoto, a city in southern Japan’s Kyushu region.

The first Japanese factory is set to open in February, with volume production beginning in the fourth quarter, and TSMC is also exploring the possibility of building a second factory there.

A statement 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.

With both factories, expects to be able to produce more than 100,000 12-inch wafers per month for automotive, industrial, consumer and high-performance computing applications,

TSMC says. Construction is expected to begin by the end of this year on the second fab.

Customer demand may further alter the capacity plan.

The Japanese venture is controlled by TSMC, a major supplier to Apple (AAPL.O) and Nvidia (NVDA.O), with Sony Group (6758.T) holding 6%, Denso holding 5.5%, and Toyota owning 2%.

As US-China trade tensions continue, expansion in Kyushu is central to the Japanese government’s strategy to rebuild its position as a leading chip manufacturer.

TSMC is building a second fab in Japan as a vote of confidence, as construction of the first fab has run smoothly and the government is easy to deal with, Reuters reports.

While rivals like Taiwanese manufacturers gained ground in the past three decades, Japan’s chip-making sector, once the world’s largest, has struggled to maintain its competitive edge.

TSMC and the Taiwan government have both said most of its most advanced manufacturing will remain in Taiwan, but the company has been expanding its global manufacturing footprint in response to customer demand.

In support of Washington’s plans to boost US chipmaking capacity, TSMC is investing $40 billion in two fabs in Arizona.

TSMC plans to mainly supply its products to the auto industry through its first European factory in Germany.

So far this year, TSMC stock has risen 8.9% on the back of strong demand for chips for AI applications, outperforming the broader index by 0.9%.

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