TSMC Considers Building Third Factory in Kumamoto, Japan... Advanced 3nm Process

Bloomberg, Citing Sources... "Informed Clients"
"26 Trillion Needed for 3nm Fab Construction"... Focus on Japan's Support

Taiwan's TSMC, the world's largest foundry (semiconductor contract manufacturer), is reportedly considering building a third semiconductor factory in Kumamoto Prefecture, Japan. Unlike the previous two factories, this new facility is expected to adopt advanced 3-nanometer (nm; 1 nanometer equals one billionth of a meter) process technology.

[Image source=Reuters Yonhap News]

On the 21st, Bloomberg News, citing multiple sources, reported that TSMC is reviewing plans to build a third factory under the codename 'Fab-23 Phase 3' for major clients such as Nvidia and Apple. Bloomberg noted that the exact start date for construction remains unclear.

TSMC is currently constructing its first factory in Kumamoto Prefecture. Announced in 2021 and started last year, it is expected to be completed by the end of this year and begin mass production by the end of next year. This factory plans to produce 12 to 28-nanometer system semiconductors.

Subsequently, in June, TSMC announced it was considering building a second factory near the first one in Kumamoto. Related reports from Japan suggest that this factory is planned to begin construction next summer and start mass production in 2027, producing semiconductors using 5 to 6-nanometer processes.

If TSMC finalizes plans to build a third factory in Kumamoto, it is expected to feature 3-nanometer process technology. This is an advanced technology currently undergoing yield stabilization by Samsung Electronics and TSMC. Considering that it takes several years from groundbreaking to full-scale production, the mass production phase might lag slightly behind the cutting-edge process. However, from Japan’s perspective, which lacks foundry technology, this would be considered a kind of 'victory,' Bloomberg assessed.

Currently, TSMC does not operate any advanced process factories outside Taiwan. Although there have been reports that the first factory in Arizona, USA, produces 4-nanometer semiconductors and the second factory will produce 3-nanometer semiconductors, these facilities have not yet fully commenced operations. Thus, no TSMC factory outside Taiwan has introduced advanced processes yet.

Japan Kumamoto TSMC's First Semiconductor Factory
[Image Source=Yonhap News]

If TSMC proceeds with building the third factory, there is a possibility that the Japanese government will provide additional subsidies. Japanese Prime Minister Fumio Kishida’s administration has already supported TSMC’s first factory with nearly 500 billion yen (approximately 4.4 trillion KRW) in subsidies and is reported to invest 900 billion yen in the second factory.

Bloomberg stated, "The specific costs will depend on when the factory is built and how the site is acquired, but building a 3-nanometer fab, including production equipment, is expected to require $20 billion (approximately 25.8 trillion KRW). The Japanese government typically covers 50% of construction costs."

However, TSMC told Bloomberg, "The company invests where necessary to meet customer demands. In Japan, we are currently focusing on evaluating the possibility of building a second fab, and at this point, there is no additional information to share."

Meanwhile, as TSMC’s first factory nears completion, the entire area around Kumamoto Prefecture is accelerating the development of basic infrastructure to support the factory. Efforts are focused on establishing related infrastructure for air, sea, and land transportation to ensure that TSMC can carry out the necessary preparations for semiconductor production smoothly during the one-year period before full-scale mass production begins.

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