TSMC Opens First Factory In Japan

Contract chip manufacturing giant, Taiwan Semiconductor Manufacturing Co (TSMC) has officially opened its first factory in Japan.

TSMC announced at the weekend that it had held an opening ceremony for its majority-owned subsidiary Japan Advanced Semiconductor Manufacturing Inc (JASM) in Kumamoto Prefecture, Japan.

It comes after TSMC earlier this month confirmed it would build a second fab in Japan, with the backing of well known Japanese businesses including Sony Semiconductor Solutions Corp; DENSO Corp; and Toyota Motor Corp.

That second fab “is scheduled to begin operation by the end of the 2027 calendar year.”

Japanese factory

At the moment, most of TSMC’s manufacturing remains in Taiwan, but the firm is currently also building plants in Germany and the US state of Arizona.

But Japan was chosen by TSMC in October 2021, when it confirmed multiple reports that it was considering building a chip factory in Japan, in conjunction with Sony Corp, alongside an investment from the Japanese government.

Construction of the first Japanese plant for TSMC began in April 2022, with actual manufacturing of the first fab expected to begin in late 2024.

That fab is to be jointly run with Sony, and is located in Kumamoto Prefecture, on land apparently owned by Sony and in an area adjacent to the Sony’s image sensor factory.

That first TSMC fab is focused on larger 22nm and 28nm chips used for image sensors and microcontrollers.

It cost $7 billion, which was split between TSMC, Sony, and the Japanese government.

And now this first Japanese factory has been officially opened on Saturday 24 February.

Representatives from TSMC included TSMC Founder Dr. Morris Chang, TSMC Chairman Dr. Mark Liu, and TSMC CEO Dr. C.C. Wei.

During the event, Japanese Prime Minister Fumio Kishida announced via video that the Japanese government has decided to support the expansion of the site, with the second factory.

Japan had previously promised TSMC 476 billion yen ($3 billion) in government funding to encourage the semiconductor giant to invest. PM Kishida confirmed a second package, raising Japan’s support to more than 1 trillion yen ($7 billion).

With both fabs, JASM’s Kumamoto site is expected to offer a total production capacity of more than 100,000 12-inch wafers per month starting from 40, 22/28, 12/16 and 6/7 nanometer process technologies for automotive, industrial, consumer and HPC-related applications.

The overall investment in JASM will exceed $20 billion with strong support from the Japanese government.

Chip incentives

The two fabs are expected to directly create more than 3,400 high-tech professional jobs.

In line with TSMC’s commitment to green manufacturing, JASM will implement rigorous sustainability practices including using 100 percent renewable energy when it starts operation, replenishing more than 100 percent of the groundwater it uses, and building a local supply chain.

“JASM will use the latest green manufacturing practices to produce best-in-class specialty semiconductor technology that will help to unleash innovation and bolster the Japanese economy for years to come,” said TSMC Chairman Dr. Mark Liu. “We are thankful for the joint efforts of our partners in Japan whose unfaltering support has contributed greatly to the success of this project.”

Japan has earmarked approximately 5 trillion yen ($33 billion) to revive its domestic chip industry.

It should be remembered that four decades ago, Japan had dominated chip manufacturing, thanks to the likes of Toshiba and NEC controlling half the world’s production at that time.

But competition from fabs in South Korea, the US and Europe, as well as TSMC’s Taiwanese base, saw that production rate drop to under 10 percent.