TSMC Expands Presence in Japan with Second Fab Construction

TSMC, the leading semiconductor manufacturer, is set to build a second fab at Kumamoto in Japan. In order to secure a stable supply of automotive integrated circuits (ICs), Toyota has invested in TSMC's subsidiary, Japan Advanced Semiconductor Manufacturing (JASM). The Nikkei reports that JASM is currently constructing an $8.6 billion fab in Kikuyo, Kumamoto Prefecture, with investments already made by Sony, Denso, and the Japanese government. Other companies are expected to join in the investment as well.

Concerns have been raised by some Japanese auto manufacturers regarding the capacity of the first Kumamoto fab to meet their chip supply needs. As a result, the TSMC board has approved an investment of up to $5.26 billion in JASM. The combined cost of Kumamoto 1 and 2 will amount to $20 billion, with strong support from the Japanese government, according to TSMC.

Kumamoto 1 is scheduled to commence operations later this year, utilizing a 12nm process. On the other hand, Kumamoto 2 is expected to begin production at the end of 2027, employing a 6/7nm process. Bloomberg reports that there are discussions about the potential establishment of a third Kumamoto fab, which would operate on a 3nm process.

Together, Kumamoto 1 and 2 will have the capacity to run 100,000 12-inch wafers per month and will generate over 3,400 job opportunities. The Japanese government is actively organizing semiconductor subsidies amounting to $13 billion, some of which has already been paid to TSMC.

Following the latest investment, TSMC now holds 86.5% of JASM, while Sony, Denso, and Toyota have ownership stakes of 6%, 5.5%, and 2%, respectively.