TSMC plans $17b 3nm chip plant investment in Japan: reports

Japan’s government is considering additional support for Taiwan Semiconductor Manufacturing Company (TSMC) to invest around US$17 billion in a new 3-nanometre chip factory in Kumamoto, according to Yomiuri.

The company plans to produce advanced chips at the site, which is part of its broader expansion in Japan’s Kyushu region.

TSMC initially intended to invest US$12.2 billion in a separate capacity for 6-12 nanometre chips at a second Kyushu fab, but discussions are ongoing with the Japanese government regarding potential changes to this plan.

Japan is also subsidizing local foundry Rapidus on Hokkaido, which aims to produce cutting-edge chips.

Officials have indicated that the chips from TSMC and Rapidus will serve different markets and are not viewed as direct competitors.

Securing advanced chip supply remains a priority for governments worldwide due to its importance for electronics, automotive, and defense sectors.

TSMC did not respond to requests for comment.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

TSMC’s Japan expansion follows years of planning

A possible 3-nanometre fab would extend a partnership that has been building for years.
Japan started courting Taiwan Semiconductor Manufacturing Company (TSMC) in 2019. Officials raised supply security concerns amid US-China tensions 1.
Sony, which sources image sensor logic chips from TSMC, asked for a dedicated plant in July 2020 1.
TSMC shifted a planned 28-nanometre line called Fab14B from Tainan to Kumamoto. The move came with subsidies of about ¥476 billion 1.
Spending on Japan Advanced Semiconductor Manufacturing (JASM), TSMC’s manufacturing venture in Japan, is expected to top US$20 billion. The Japanese government is backing the project 2.

Japan is pursuing a diversified chip strategy

The 3-nanometre talks sit within a broader industrial plan.
TSMC’s first Kyushu fab has entered mass production. It is expected to run 22/28-nanometre and 12/16-nanometre nodes 3.
A second fab is slated to start operations by the end of 2027. It is expected to add 6/7-nanometre production 2.
This mix spreads capacity across mature and advanced nodes. It aims to support multiple sectors.
The Kyushu Economic Research Association forecasts a regional spillover of about US$146 billion from 2021 to 2030 3.