[News] Rumored to Build Third Plant in Kumamoto, TSMC: Currently Focusing on Assessing the Construction of a Second Plant

2023-11-22 Semiconductors editor

According to Bloomberg’ report, TSMC is contemplating the construction of its third wafer fabrication plant in Kumamoto, Japan, focusing on the 3-nanometer manufacturing process. This move could position Japan as a global hub for semiconductor manufacturing.

After being inquired by Taiwan’s media, Economic Daily News, TSMC responded on November 21 to these rumors, stating that the expansion of the company’s global manufacturing footprint is driven by factors such as customer demand, business opportunities, operational efficiency, government support, and economic considerations.

In the response, TSMC also mentioned that it continues to make necessary investments to support customer needs and address the structural growth in semiconductor technology’s long-term demand. Currently, the company is actively evaluating the possibility of establishing a second wafer fabrication plant in Japan, with no additional information available for sharing.

Bloomberg reports that TSMC has informed its supply chain partners about considering the construction of a third plant in Kumamoto, codenamed ” TSMC Fab-23 Phase 3,” but the commencement date remains uncertain.

Analyst Joanne Chiao from TrendForce points out that Japan’s expertise in materials and machinery is one of the factors attracting TSMC’s expansion. Japan stands to benefit from TSMC’s establishment as the pace of creating a local semiconductor ecosystem by Japanese government surpasses that of the U.S. government.

In addition to TSMC, Japan has successfully attracted investments from Micron, Samsung, and Powerchip Semiconductor Manufacturing Corporation (PSMC). Japanese government is also assisting the local Rapidus in constructing a 2-nanometer chip plant in Hokkaido.

TSMC’s current overseas facility receiving the largest subsidy is its first new plant in Kumamoto, Japan. TSMC holds the majority of shares in the Kumamoto plant and collaborates with customers and Japanese officials through joint ventures with Sony Semiconductor Solutions Corporation and DENSO Corporation, investing in the plant’s subsidiary, JASM. The plant is set to enter mass production by the end of 2024, producing chips in 22/28-nanometer and 12/16-nanometer processes.

Due to strong support from Japanese authorities, TSMC’s capital expenditure for its first new plant in Kumamoto has increased from $7 billion to $8.6 billion. The Japanese Ministry of Economy, Trade, and Industry approved a subsidy of JPY 476 billion (approximately USD 3.5 billion) in June of the previous year, translating to 40% of the total capital expenditure of TSMC’s new facility.

Following the confirmation of an expanded subsidy program by Japanese authorities, TSMC is planning to build a second wafer fabrication plant near the first one. Rumors suggest that as early as 2025, TSMC may introduce Extreme Ultraviolet (EUV) lithography machines for production in processes below 7 nanometers.

(Photo credit: TSMC)

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