TSMC's New Chip Plant to Elevate Japan's Tech Scene, Secures Toyota Partnership

Taiwan Semiconductor Manufacturing Co TSM is significantly expanding its presence in Japan by announcing the opening of a second chip fabrication plant. 

This development substantially boosts Prime Minister Fumio Kishida’s efforts to enhance Japan’s domestic semiconductor production capabilities. 

Previous reports indicated that Taiwan Semiconductor is eyeing a second Japanese plant in Kumamoto, potentially investing $13.5 billion. 

TSMC’s expansion in Japan includes a $8.6 billion wafer factory and a $20 billion 3nm chip plant.

Toyota Motor Corp TM has joined as a new investor in TSMC’s Japan Advanced Semiconductor Manufacturing, Inc (JASM), TSMC’s majority-owned manufacturing subsidiary in Kumamoto, Bloomberg reports. 

The TSMC board has committed up to $5.26 billion to JASM, aiming to advance the subsidiary’s manufacturing capabilities by including 6/7 nanometer process technology at the new facility.

Scheduled to commence operations by the end of 2027, this second facility will complement the existing plant in Kumamoto, pushing the total investment in the region to over $20 billion. 

The new TSMC plants in Kumamoto will likely produce more than 100,000 12-inch wafers monthly and generate over 3,400 high-tech jobs, enhancing Japan’s semiconductor production capacity. 

Additionally, TSMC is exploring the potential for a third factory in Japan that would utilize cutting-edge 3nm technology.

In conjunction with its Japanese expansion, TSMC is also advancing its international footprint with construction projects in Arizona and the U.S. and plans for a facility in Germany despite facing delays in the U.S. due to labor and cost issues. 

Nonetheless, the expansion in Japan is proceeding smoothly, with TSMC, Sony, Denso, and Toyota set to hold significant stakes in JASM.

Price Action: TSM shares traded lower by 0.13% at $118.63 on the last check Tuesday.

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

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