Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is considering building a third plant in Japan that would make advanced 3-nanometer chips, people familiar with the matter said, potentially turning the East Asian nation into a major global chipmaking hub.
The go-to chipmaker for Nvidia Corp and Apple Inc has told its supply chain partners it is mulling construction of a third factory, code-named TSMC Fab-23 Phase 3, in the southern Japanese prefecture of Kumamoto, the people said, asking not to be named as the information is not public.
TSMC is in the process of building one fab in Japan for less advanced chips, and plans for a second facility have been reported earlier. It is unclear yet when the company would start construction of the third fab.
Photo: Bloomberg
The 3-nanometer process is the most cutting-edge chipmaking technology commercially available, although by the time TSMC’s potential fab is up and running, the technology would likely be one to two generations behind that.
Japanese Prime Minister Fumio Kishida’s administration has been providing trillions of yen in subsidies to lure investments from domestic and foreign semiconductor companies. In addition to TSMC, Tokyo has secured investments from Micron Technology Inc, Samsung Electronics Co and Powerchip Semiconductor Manufacturing Corp (力積電). Japanese officials are also helping domestic start-up Rapidus Corp set up production lines for cutting-edge 2-nanometer chips in Hokkaido.
Tokyo has moved more quickly in building up a domestic semiconductor ecosystem than Washington, which is also trying to build domestic capabilities for economic and national security reasons. The Japanese government has handed out subsidies to firms while US President Joe Biden’s administration has yet to distribute a dime to any company from the CHIPS and Science Act that earmarked more than US$50 billion for the semiconductor industry.
A 3-nanometer fab is likely to cost about US$20 billion, including the machines for production, although precise expenses would depend on when the facility is built and how it acquires land and other materials. It is not yet clear how much TSMC anticipates spending on the third fab. Japan typically covers about 50 percent of the costs of such facilities.
“TSMC is investing where necessary to support customers’ needs,” the company said in an e-mailed statement. “In Japan, we are currently focused on evaluating the possibility of building a second fab and we do not have further information to share at this time.”
While few Japanese firms now need the most advanced chips, the country would soon require them for next-generation technologies, including artificial intelligence applications and autonomous driving.
Japan’s economy would face significant risks if the country relies completely on imports for these critical components, local officials have argued.
TSMC is building a plant in Kumamoto, with investments from Sony Group Corp and Denso Corp, that is expected to start making chips as advanced as 12 nanometers in late next year.
TSMC would also build a second fab, close to its first plant in Kumamoto, that is expected to start making 5-nanometer chips in 2025, some of the people said.
When TSMC first planned to create a manufacturing presence in Japan, its initial blueprint included multiple plants so it could best utilize ancillary facilities it has to build for its campus in Kumamoto, the sources said.
The Taiwanese chipmaker might even build a fourth plant, possibly in a prefecture to the north of Kumamoto due to a shortage of land, several of them said.
Japan’s expertise in chip materials and machinery makes the country an attractive location for TSMC’s expansion, said Joanne Chiao (喬安), an analyst with Taipei-based research firm TrendForce Corp (集邦科技).
“Japan’s critical role in semiconductor and raw materials, combined with collaboration with Sony, offers compelling advantages for TSMC as its investment in the country is expected to help with its access to advanced materials and specialized image sensor technologies,” she said.
In return, Japan would benefit significantly from TSMC’s presence. The GDP of Kyushu region, which includes Kumamoto, is estimated to expand to ￥75 trillion (US$507.75 billion) in 2035 from the current scale of ￥50 trillion, SMBC Nikko Securities Inc analyst Ryosuke Katsura said.
In addition to Japan, TSMC has also pledged to build two plants in the US and one in Germany as its customers want more diversified supplies in the face of growing uncertainties in the Taiwan Strait.
PRICE HIKES: The war in the Middle East would not significantly disrupt supply in the short term, but semiconductor companies are facing price surges for materials Taiwan’s semiconductor companies are not facing imminent supply disruptions of essential chemicals or raw materials due to the war in the Middle East, but surges in material costs loom large, industry association SEMI Taiwan said yesterday. The association’s comments came amid growing concerns that supplies of helium and other key raw materials used in semiconductor production could become a choke point after Qatar shut down its liquefied natural gas (LNG) production and helium output earlier this month due to the conflict. Qatar is the second-largest LNG supplier in the world and accounts for about 33 percent of global helium output. Helium is
DOMESTIC COMPONENT: Huang identified several Taiwanese partners to be a key part of Nvidia’s Vera Rubin supply chain, including Asustek, Hon Hai and Wistron Nvidia Corp chief executive officer Jensen Huang (黃仁勳), addressing crowds at the company’s biggest annual event, unveiled a variety of new products while predicting that its flagship artificial intelligence (AI) processors would help generate US$1 trillion in sales through next year. During a two-and-a-half-hour keynote address, Huang announced plans to push deeper into central processing units (CPUs) — Intel Corp’s home turf — and introduced semiconductors made with technology acquired from start-up Groq Inc. The company even said it was developing chips for data centers in outer space. At the heart of Huang’s speech was the message that demand for computing power
OPTIMISTIC: Inflation still has a chance of remaining below the central bank’s 2 percent alert level, as Taiwan’s economy is resilient with healthy exports, the NDC minister said Taiwan’s inflation could exceed 2 percent this year if oil prices continue to surge amid escalating tensions in the Middle East, prompting the government to reassess its economic outlook, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. DGBAS Minister Chen Shu-tzu (陳淑姿) told lawmakers at a meeting of the legislature’s Finance Committee that the agency’s earlier growth forecast of 1.68 percent in the consumer price index (CPI) and 7.71 percent for GDP this year did not account for the ongoing Middle East conflict and would need revision, if tensions persist. The previous forecast assumed an average international crude price of
ELECTRIC DREAMS: Smart cities would use ‘virtual power plants,’ which integrate idle electricity use from households, businesses and factories, Asustek said Asustek Computer Inc (華碩) yesterday showcased key components of its artificial intelligence (AI)-driven smart city initiatives at a trade show in Taipei, eyeing new business opportunities as cities develop sovereign AI infrastructure. Advances in generative, multimodal and physical AI are driving cities toward a new phase of “sovereign AI,” Asustek cochief executive officer Samson Hu (胡書賓) told reporters on the sidelines of the Smart City Summit and Expo at Taipei Nangang Exhibition Center’s Hall 2. The company showcased its “AI City” framework, which comprises three layers — computing infrastructure centered on AI servers, AI models and a platform layer for data processing
RSS