TSMC is opening its second chip factory in Japan

Paresh Jadhav

11 months ago

TOKYO Japan wants chip suppliers that have outsourced production for years to invest more at home, according to Taiwan Semiconductor Manufacturing Co., one of the world’s top contract chip makers.

TSMC plans to build its second plant in Kumamoto, Southern Japan. Sony and Toyota Motor Group subsidiary Denso will share ownership.

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TSMC’s Strategic Decision to Double Down on Kumamoto

Kikuyo, Japan is currently witnessing the impact of global chip foundry giant TSMC’s first plant in Japan – currently underway in southwestern Kumamoto Prefecture – being built there, though these changes won’t impact everyone.

JASM, scheduled to start production by 2024, will boast an expected monthly capacity of over 100,000 12-inch wafers for automotive, industrial and consumer electronics applications as well as high performance computing applications.

To support JASM, TSMC has invested more than $20 billion into Japan and secured investments from major corporations like Sony. Unfortunately, much of that wealth hasn’t trickled down to local residents but instead remains concentrated among a small number of wealthy individuals. Kikuyo in particular is suffering due to road congestion from construction sites linked to TSMC; therefore more money and better infrastructure investments would help clear away congestion; however TSMC needs to evaluate how their first fab performs before making a decision on another plant in Japan

Aiming to Strengthen Japan’s Semiconductor Industry

Japan will contribute 476 billion yen in subsidies towards a plant scheduled to open by 2024 and produce logic chips used by smartphones and car components, using circuit line widths between 10-20 nanometers, according to sources familiar with the project.

Toyota, Sony and Denso – three companies which consume significant volumes of chips – are all members of this Japanese consortium and will benefit greatly from having access to an uninterrupted supply of logic chips for their autonomous vehicle products.

Japan has increasingly relied on foreign firms for advanced semiconductor technologies, as evidenced by the US’s recognition that regaining leadership in chips requires international collaborations. TSMC’s presence in Japan serves as evidence of this fact – as it is one of the world’s largest contract chipmakers and an Apple supplier; Japanese firms Ulvac and Sumitomo Bakelite are improving equipment to eliminate microscopic impurities that could compromise chip performance.

Over $20 Billion Investment in Japan Advanced Semiconductor Manufacturing (JASM)

The joint investment by TSMC, Sony Semiconductor Solutions Corp (SSS), and Toyota affiliate Denso into JASM’s second plant will surpass $20 billion with strong support from the Japanese government. This facility, majority owned by TSMC and dedicated to specialty technology foundry services will respond directly to strong market demands.

This new facility will specialize in image sensor data signal processors and automotive ICs to meet Sony, Toyota and other Japanese customers’ demands for image sensors, such as Sony and Toyota. Furthermore, this project demonstrates Japan’s highly specialized chip industry working hand in hand with its vibrant automotive sector.

These investments underscore TSMC’s dedication to diversifying global semiconductor supply, by targeting specific industrial and automotive applications while strengthening global supply chain resilience. Their expansion in Japan aligns with Japan’s initiative to bolster domestic chip production as it reclaims its place as a premier semiconductor maker worldwide; C.C. Wei recently indicated the possibility of opening another plant there as well.

Enhanced Global Supply Chain Resilience

TSMC’s decision to invest in its second Japan plant and expand global manufacturing operations reflects their recognition of semiconductors’ increasing importance in various technological applications. Their global capacity expansion will reduce asset concentration risk while assuaging major customers’ concerns regarding long-term supply chain resilience.

Japan Advanced Semiconductor Manufacturing Inc (JASM), a majority-owned TSMC operation, plans to invest $20 billion in their new factory’s construction; work will commence this year and should be complete by 2027.

The Japan Advanced Solar Manufacturing (JASM) plant will bolster Japan’s technology industry and reduce reliance on foreign suppliers, while simultaneously stimulating Kyushu’s economy through Sony and Toyota partnerships to construct its first plant there – revitalizing an industrial sector which had been declining, creating jobs, and driving real estate prices upward.