"TSMC Finds It Difficult to Procure 50% of Japanese Equipment and Materials at Its Japan Factory"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Yuichi Horita, president of JASM, TSMC's Japanese subsidiary responsible for the factory being built in Kumamoto Prefecture, Japan, said that it would be difficult for the procurement rate of equipment and materials to be used in the factory from Japan to reach 50%. He predicted that if suppliers do not make active investments, the procurement rate within Japan would be limited to 25%.

In an interview with Japan's Nihon Keizai Shimbun published on the 23rd, President Horita was asked about the goal of achieving a 50% procurement rate of equipment and materials for the Kumamoto factory within Japan. He responded that "this is not a number that can be easily achieved," and stated that the fine process level of the Kumamoto factory would be between 22 nanometers (nm; 1 nm is one billionth of a meter) and 28 nm, or between 12 nm and 16 nm.

President Horita explained that 16 nm logic semiconductors have never been produced in Japan before, and that previously, manufacturing in Japan was limited to 40 nm. He emphasized, "Even if the products are from Japanese makers, many are produced in Taiwan," and added, "To raise the procurement rate within Japan, suppliers need to produce domestically, which will require significant investment." He also indicated that if production takes place in Japan, it would have significance for Japan as well, and expressed the intention to first increase the procurement rate of materials within Japan.

In the interview, President Horita stressed the importance of securing semiconductor-related personnel. He said, "As TSMC is the industry leader, it is significant that employees can acquire the latest knowledge and technology," and expressed a desire to secure as many talented individuals as possible. He revealed that out of a total of 1,700 employees, about 320 would be from Taiwan, and among the remaining 700 employees, half would be new hires and half experienced recruits. He also projected that 200 personnel would come from the joint venture Sony, and 500 talents would be supplied externally.

President Horita stated, "It is difficult to operate the factory with only new hires, so the challenge is how to bring experienced personnel from outside Kumamoto. Providing value and giving back to employees is TSMC's policy, and our treatment is not inferior to other companies." He emphasized, "Without people, the factory cannot operate, so securing personnel takes priority over cost reduction."

TSMC's Kumamoto factory plans to first install equipment and gradually begin pilot operations aiming for October next year. President Horita said that personnel coming from Taiwan will be formed into a JASM team for training, and personnel coming from Sony will also undergo training in Taiwan after this fall to learn TSMC-style factory operation know-how and work procedures.

Earlier, TSMC announced that it would jointly invest about 1 trillion yen with Sony to build a factory in Kumamoto Prefecture and start mass production in December 2024. In November last year, TSMC announced that the factory would produce 45,000 12-inch wafers per month. The total number of employees is 1,700. The semiconductors produced at this factory are expected to be supplied to Japanese electronics and automobile companies such as Sony and Toyota. The Japanese government plans to support TSMC with 400 billion yen (approximately 3.9 trillion won) for building the semiconductor factory in Kumamoto.

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