TSMC Sets Sights on Japan for Next-Gen Chip Manufacturing, Boosting Global Tech Leadership

Taiwan Semiconductor Manufacturing Co TSM is stepping up its efforts to diversify chip production beyond Taiwan, with plans to begin constructing a second factory in Japan later this year. 

The key Nvidia Corp NVDA supplier’s new facility in Kumamoto prefecture is expected to be operational by the end of 2027 and will manufacture 6-nanometer chips, marking the most advanced semiconductors produced in Japan. 

Alongside the first Kumamoto plant currently under construction, these two factories will boast a combined capacity of at least 100,000 12-inch wafers a month, aligning with the capacity of TSMC’s gigafabs in Taiwan, Nikkei Asia reports.

In a strategic move to diversify production and mitigate risk, TSMC is expanding in Japan and establishing facilities in Arizona, USA, for 4-nanometer chips and in Germany for 12- to 28-nanometer chips. 

This global expansion aims to increase TSMC’s production capacity outside Taiwan to 300,000 wafers a month by 2028, accounting for over 20% of its current total capacity.

Despite the global push, TSMC remains committed to keeping the production of its most advanced chips in Taiwan, with plans to scale up production of next-generation 2-nanometer chips in Hsinchu next year. Additionally, a facility initially intended for legacy chips in Kaohsiung is being repurposed for 2-nanometer fabrication, reflecting TSMC’s agile response to the booming demand for generative artificial intelligence technologies.

Japan is investing up to ¥45 billion ($300 million) to support the Leading-edge Semiconductor Technology Center (LSTC) in developing advanced chip technologies, Bloomberg reports. 

The Ministry of Economy, Trade, and Industry (METI) has sanctioned outsourcing research on state-of-the-art fabrication technologies to LSTC, a collective of Japanese researchers specializing in nanotechnology, materials, and artificial intelligence. 

TSMC gained over 38% last year courtesy of AI frenzy.

Price Action: TSM shares traded higher by 0.76% at $134.74 premarket on the last check Friday.

Also Read: Taiwan Semi Signals Sector Recovery with Strong January Sales: A Look Ahead for Tech Investors

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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