[News] TSMC Reportedly Considering Establishment of Advanced Packaging Facility in Japan

2024-03-18 Semiconductors editor

According to sources cited by Reuters,  TSMC is reportedly considering plans to establish a production line for its CoWoS technology in Japan. However, TSMC has yet to make any further decisions, and they have declined to comment on the matter.

CoWoS is an advanced packaging technology that stacks chips to enhance computing power, reduce energy consumption, and save space. Currently, TSMC’s CoWoS production capacity is entirely located in Taiwan.

With the booming development of artificial intelligence, global demand for advanced semiconductor packaging has surged, prompting chip suppliers like TSMC, Samsung, and Intel to strengthen their advanced packaging capabilities.

Previously, TSMC’s CEO, C.C. Wei, stated that the company plans to double its CoWoS output by the end of 2024 and further increase it in 2025. With TSMC recently completing the first phase of construction for its Kumamoto fab in Japan and announcing plans for the second phase, which will involve collaboration with Japanese companies SONY Semiconductor Solutions and Toyota Motor Corporation, with a total investment exceeding USD 20 billion and utilizing 6/7-nanometer advanced processes.

However, Joanne Chiao, an analyst at market research firm TrendForce, suggests that if TSMC establishes advanced packaging capacity in Japan, it may face limitations in scale. It remains unclear how much demand there is in Japan for CoWoS packaging, but most of TSMC’s CoWoS customers are currently in the United States.

Additionally, sources cited by Reuters’ report indicate that TSMC’s competitor, Intel, is also considering establishing an advanced packaging research facility in Japan to deepen ties with local chip supply chain companies.

Meanwhile, Samsung, another competitor of TSMC, is setting up advanced packaging research facilities in Yokohama, Japan, with government support. Furthermore, Samsung is in discussions with Japanese and other companies regarding material procurement, preparing to launch its packaging technology similar to that used by SK Hynix.

Regarding the development of the semiconductor industry in Japan, as mentioned in a previous report from TrendForce, Japan’s resurgence in the semiconductor arena is palpable, with the Ministry of Economy, Trade, and Industry fostering multi-faceted collaborations with the private sector. With a favorable exchange rate policy aiding factory construction and investments, the future looks bright for exports.

However, the looming shortage of semiconductor talent in Japan is a concern. In response, there are generous subsidy programs for talent development. Japan is strategically positioning itself to reclaim its former glory in the world of semiconductors.

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(Photo credit: TSMC)

Please note that this article cites information from Reuters.