Taiwan TSMC and Japan Semiconductor Join Forces to 'Check Samsung' (Comprehensive)

World's No.1 Foundry Taiwan TSMC
Invests 210 Billion to Establish R&D Hub in Japan
Japan Provides Subsidies for Joint Ventures with Domestic Companies

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Taiwan's TSMC, the world's largest semiconductor foundry (contract manufacturing) company, has decided to establish its first research and development (R&D) base in Japan. Amid the global semiconductor shortage, analysts suggest that TSMC is quickly forming an alliance with Japan following the United States to solidify its top position. As a result, Samsung Electronics is expected to face deeper challenges. Samsung Electronics, which is chasing TSMC, needs large-scale investments to support its efforts, but due to the current absence of Vice Chairman Lee Jae-yong, it is difficult to announce aggressive investment news.

According to the Nihon Keizai Shimbun on the 9th, TSMC plans to invest 20 billion yen (approximately 210 billion KRW) to establish a semiconductor R&D company in Tsukuba City, Ibaraki Prefecture. The company is expected to hold a board meeting soon to approve the plan to enter Japan and announce it as early as this week, the Nihon Keizai reported. A TSMC official said, "We cannot comment, but we will announce it once a decision is made."

TSMC's newly established company in Japan will mainly be responsible for technology development related to packaging work, known as the 'back-end process' of semiconductors. It is also known that plans to install semiconductor production lines are under consideration.

The Japanese government is also expected to provide support. The Ministry of Economy, Trade and Industry of Japan regards semiconductors as a strategic sector and is willing to offer subsidies if TSMC collaborates with Japanese companies, according to the Nihon Keizai.

If Japan, which leads the global market in semiconductor equipment and materials, expands its collaboration with TSMC, the number one foundry company, it could pose a significant threat to domestic companies such as Samsung Electronics. TSMC is already actively collaborating with Japanese companies in its home country, Taiwan. Moreover, TSMC plans to invest about 30 trillion KRW in facilities this year alone, including building an advanced semiconductor factory in the United States, its first overseas plant.

According to Taiwan's market research firm TrendForce, as of last year, TSMC held a 54% share of the global foundry market, ranking first. Samsung Electronics' share was 17%, widening the gap with TSMC. Following them, the U.S. company GlobalFoundries (GF) and Taiwan's UMC jointly held third place with 7% each. China's SMIC followed with 5%.

Samsung Electronics, strong in the memory sector, has recently been expanding investments to strengthen its foundry business. However, the re-imprisonment of Vice Chairman Lee has slowed the pace of investment.

Meanwhile, after halting transactions with China's Huawei at the request of the United States, TSMC has been strengthening partnerships with U.S. semiconductor companies such as Intel. There is also speculation about the formation of a semiconductor alliance among the U.S., Japan, and Taiwan to counter China's semiconductor ambitions. The Nihon Keizai analyzed, "It seems TSMC has judged that it cannot exclude Japan, where the world's leading equipment and material companies gather, to accelerate advanced semiconductor development," adding, "This appears to be a strategy to guard against China's rise and maintain the current world's largest foundry company's dominance."

This content was produced with the assistance of AI translation services.