Key Nvidia Supplier TSMC Reportedly Eyes Advanced 3nm Chip Plant In Japan

Taiwan Semiconductor Manufacturing Co TSM is reportedly considering the construction of a third advanced chipmaking plant in Japan, which would produce 3-nanometer chips. This potential facility, TSMC Fab-23 Phase 3, would be in Kumamoto prefecture. 

The key Nvidia Corp NVDA and Apple Inc AAPL supplier is already building a plant in Japan for less advanced chips and has plans for a second facility. The 3nm technology represents the forefront of chipmaking, but by the time this new plant becomes operational, more recent generations might beat it, Bloomberg reports.

Japan has already secured commitments from several major companies, including Micron Technology Inc MU, Samsung Electronics Co SSNLF, and Powerchip Semiconductor Manufacturing, and is supporting domestic startup Rapidus Corp in developing 2nm chip technology.

Japan's progress in creating a semiconductor ecosystem is notably faster than similar efforts in the U.S. The report further adds that the Japanese government has provided subsidies proactively, while the U.S. has yet to allocate funds from its Chips and Science Act.

The cost of a 3nm fab is estimated at around $20 billion, with Japan typically covering about half of such expenses. 

Japan's need for advanced chips is growing, particularly for applications in artificial intelligence and autonomous driving. TSMC's presence in Japan, including its ongoing projects and potential future expansions, is beneficial for the company and the country. Japan's expertise in semiconductor materials and collaboration with companies like Sony Group Co SONY enhances TSMC's expansion prospects. The economic impact of TSMC's investments will likely boost the regional GDP significantly. Additionally, TSMC is expanding globally, with plans for plants in the U.S. and Germany.

Price Action: TSM shares closed higher by 0.38% at $99.96 on Monday.

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

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