Historic Moment Reached as Chipmaking Giant Unveils Initial Plant in Japan - Firm Establishes a Significant Relationship Through Symbolic Groundbreaking Ceremony
TSMC Expands Semiconductor Manufacturing in Japan, Aiming for Advanced 5-7nm Processes
TSMC, the world's largest contract manufacturer of semiconductors, is expanding its semiconductor manufacturing footprint in Japan. The company announced plans to build a second chip fabrication plant (fab) in Kumamoto Prefecture, focusing on advanced 5 to 7 nanometer processes crucial for industries like automotive and consumer electronics.
The project is part of a broader $20 billion investment in Japan, with significant subsidies (up to around $8 billion) from the Japanese government supporting this expansion. The Japanese government is a significant investment partner, reflecting Japan’s strategic push to secure advanced semiconductor supply chains.
Details about the new plants and timeline:
The second TSMC factory in Japan will enhance 5-7 nm chip production, complementing their existing Kumamoto fab that produces 12 to 28 nm chips and began volume production in the second half of 2024. Construction for the second fab was initially expected to start in early 2025, with an operational target around 2027. However, there have been multiple delays pushing volume production now to the first half of 2029, approximately 18 months later than originally planned.
The delays are attributed to local infrastructure issues like congestion and traffic, as well as strategic resource allocation favoring expansion of TSMC’s US fabs to mitigate tariff risks and respond to shifting market demands. Despite the delays, the total planned production capacity across the two Kumamoto fabs is expected to exceed 100,000 12-inch wafer equivalents per month once fully operational.
JASM and Investment Partners
Japan Advanced Semiconductor Manufacturing (JASM), a TSMC subsidiary, will receive additional investment from TSMC, Sony Semiconductor Solutions, Denso, and Toyota. The commitment between Toyota and TSMC was sealed during a conversation between Toyota Chairman Akio Toyoda and TSMC CEO C.C. Wei ahead of the opening ceremony, marking a significant milestone for TSMC in Japan.
Impact on the Global Semiconductor Market
The expansion solidifies Japan as a growing hub for semiconductor manufacturing beyond Taiwan and the US, diversifying geographic supply chains to increase resilience amid global chip shortages and geopolitical tensions. TSMC's focus on 5-7 nm node production in Japan aligns with increasing demand for high-performance chips in automotive electronics, industrial applications, and data centers, critical sectors experiencing rapid growth globally.
The investment and resulting capacity are expected to help stabilize supply and reduce risks from tariff impositions and trade disruptions, particularly between the US, Taiwan, and China. The semiconductor supply crunch, linked to the increased demand caused by the rebound in vehicle production, has been a significant issue worldwide. With advances in CASE technologies, cars are becoming increasingly intelligent, increasing the importance of semiconductors. Extra-long car delivery times became a society-wide issue due to the semiconductor supply crunch.
Toyota Times News was present to capture the story on this milestone day for TSMC in Japan. TSMC is a staple of the semiconductor industry, and the opening of a new plant in Kikuyo, Kumamoto Prefecture, Japan, is a testament to the company's commitment to meeting the growing demand for cutting-edge semiconductors and balancing production across multiple regions. The expansion aims to impact the global semiconductor industry by enhancing supply chain diversity and capacity.
The company's additional investment in Japan through JASM, a TSMC subsidiary, involves strategic partnerships with industry giants such as Sony Semiconductor Solutions, Denso, and Toyota, demonstrating the appeal of the expanding semiconductor manufacturing sector in Japan to major business players.
The boom in advanced semiconductor manufacturing in Japan is not only supported by the government, but it also extends to the financial sector, with TSMC's $20 billion investment in the region highlighting the significant role of finance in the growth of technology-driven industries like business and industry.
