TSMC plans third plant in Japan amid aggressive tech push

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TSMC plans third plant in Japan amid aggressive tech push
Credit: © Reuters.

Taiwan Semiconductor Manufacturing Co. (TSMC) is considering the addition of a third plant in Kumamoto, Japan, which may produce cutting-edge 3-nanometer chips for major clients such as Nvidia Corp . (NASDAQ: NVDA ) and Apple Inc (NASDAQ: AAPL ). This move aligns with Japanese Prime Minister Fumio Kishida's robust drive for technological investments. However, the start dates for the plant remain unclear, with concerns that by the time it launches, newer technologies might surpass the planned advancements.

Japan's proactive approach to semiconductor manufacturing is further emphasized by Rapidus Corp.'s efforts to enter the sub-5nm chip market, a direct response to the delayed funding allocation from the U.S. Chips Act. TSMC's projected $20 billion investment in its Japan venture could be significantly reduced through Japanese government subsidies. The company is already moving forward with Sony (NYSE: SONY ) Group Corp.-supported facilities expected to commence production of advanced chips by late 2024, with ambitions to initiate finer-scale production by 2025.

Despite challenges such as land scarcity that could hinder expansion outside Kumamoto, TSMC's strategy indicates a strong commitment to global diversification. This is crucial given the geopolitical tensions surrounding Taiwan Strait relations. The strategic importance of Japan's semiconductor sector is evidenced by corporate interest from companies such as Powerchip Semiconductor Manufacturing Corp., Samsung Electronics (KS: 005930 ) Co., and Micron Technology Inc (NASDAQ: MU ).

Cross-industry collaborations are also taking shape, with companies like Denso Corp. contributing to economic growth prospects. According to SMBC Nikko Securities' analysis, these developments are set to significantly boost the GDP of the Kyushu region, which includes Kumamoto, showcasing Japan's increasing value in the global tech landscape and TSMC's comprehensive strategy for worldwide market presence amidst ongoing uncertainties.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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