Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, announced on Tuesday that it will build a second chip plant in Japan with the support of the Japanese government and major tech companies such as Sony and Toyota. The new plant, which will be located in Kumamoto, is expected to start operation by the end of 2027 and will focus on producing chips for automotive, industrial, consumer, and high-performance computing applications.
TSMC’s Japan Venture to Boost the Local Semiconductor Industry
TSMC’s second plant in Japan will be part of its majority-owned subsidiary, Japan Advanced Semiconductor Manufacturing, Inc. (JASM), which was established in 2021 to operate the first plant in the same location. The first plant, which cost $7 billion, is scheduled to begin volume production in the fourth quarter of this year.
The total investment in JASM, including both plants, will exceed $20 billion, according to TSMC. The company holds an 86.5% stake in JASM, while Sony, Denso, and Toyota own 6%, 5.5%, and 2%, respectively. The capacity plan for JASM may be further adjusted based on customer demand, TSMC said.
TSMC’s expansion in Japan is a strategic move to strengthen its global presence and diversify its supply chain amid the ongoing chip shortage and geopolitical tensions. It is also a response to the Japanese government’s push to revitalize its domestic semiconductor industry, which has lost its global leadership in recent years. Japan is keen to secure its chip supply for its key sectors, such as automotive, consumer electronics, and defense, as well as to foster innovation in emerging technologies such as artificial intelligence and quantum computing.
TSMC’s Global Footprint and Cutting-Edge Technology
TSMC is the world’s leading chipmaker, with a market share of over 50% in the contract chip manufacturing segment. It produces chips for many of the world’s top tech companies, such as Apple, Nvidia, Qualcomm, and AMD. It is also the pioneer in developing and mass-producing the most advanced chips, with features as small as 3 nanometers.
TSMC has been expanding its global footprint to meet the surging demand for chips and to mitigate the risks of supply chain disruptions. Besides Japan, TSMC also has operations in China, Singapore, the United States, and Europe. One of its biggest overseas projects is a $40 billion investment in Arizona, where it plans to build two chip plants as part of a broader U.S. initiative to boost its domestic chip production and competitiveness.
TSMC’s second plant in Japan will not produce the most cutting-edge chips but rather focus on chips that require special materials and processes, such as silicon carbide and gallium nitride. These chips are used for applications that require high power efficiency, reliability, and performance, such as electric vehicles, renewable energy, and 5G networks. TSMC said it will leverage its technology leadership and manufacturing excellence to deliver high-quality products and services to its customers in Japan and around the world.