TSMC Invests 8.4 Trillion Won in First Factory Construction in Japan

Construction Started in 2022, Mass Production in 2024
Producing 22~28 Nanometer Products

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Taiwan's TSMC, the world's largest semiconductor foundry (contract manufacturing) company, will invest 800 billion yen (approximately 8.3624 trillion KRW) to build its first factory in Japan. About half of this amount is expected to be supported by subsidies from the Japanese government. The factory, to be built in Kumamoto Prefecture in southwestern Japan, is scheduled to start mass production by the end of 2024.

According to the Nihon Keizai Shimbun on the 10th, TSMC will invest 800 billion yen to build its first factory in Japan, located in Kumamoto Prefecture. Sony, which is co-investing with TSMC, plans to invest 57 billion yen (approximately 595.9 billion KRW) of this amount.

The joint venture company operating the new factory will also be established in Kumamoto Prefecture, with TSMC holding the majority of shares to secure management control. Sony Semiconductor Solutions, Sony's semiconductor subsidiary, is expected to acquire less than 20% of the shares. The factory is estimated to create about 1,500 jobs. The monthly production capacity of the factory is expected to be 45,000 units based on 300mm wafers.

The construction site is planned adjacent to Sony's factory in Kikuyo Town, Kumamoto Prefecture. Construction began in 2022, aiming for mass production by the end of 2024. The factory will produce semiconductors in the 22 to 28 nanometer range. While not the most advanced products, these semiconductors are widely used in the automotive and information technology (IT) industries.

The Japanese government, having actively pursued attracting TSMC to ensure stable semiconductor supply, is reportedly preparing a subsidy framework to cover half of the factory construction costs. However, conditions include requests for increased production in case of semiconductor supply shortages and priority supply to Japanese companies. The government aims to submit related amendment bills to the extraordinary Diet session scheduled for December. If passed, TSMC's new factory in Japan is expected to be the first beneficiary. The funding is expected to be secured in the 2021 budget. This will likely be the largest subsidy the Japanese government has provided to a foreign company.

TSMC and Sony responded that "this is based on receiving strong support from the Japanese government."

Meanwhile, TSMC currently produces over 90% of its semiconductors in Taiwan. Overseas, besides Nanjing City in Jiangsu Province, China, it is constructing a new factory in Arizona, USA. Once the Japanese factory is completed, the main overseas production bases will be in three countries: the USA, China, and Japan.

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