TSMC’s first Japanese plant began operations in the southern prefecture of Kumamoto on Feb. 24, as the company confirmed plans for a second factory in the country within the year. TSMC’s 92-year-old founder, Morris Chang, attended the opening ceremony in Kumamoto, and Japan’s Prime Minister Fumio Kishida sent a congratulatory video message.

Why it matters: TSMC’s decision to build factories in Japan was hastened by incentives provided by the Japanese government, aiming to accelerate the growth of the local semiconductor industry by fostering collaborations with international foundries. Additionally, TSMC was enticed by Japan’s abundance of water resources and concentration of related tech companies that the firm needs to thrive in the sector, as suggested by industry analysis.

Details: TSMC founder Morris Chang, Chairman Mark Liu, CEO C.C. Wei, and other senior executives attended the opening ceremony of its majority-owned subsidiary JASM (Japan Advanced Semiconductor Manufacturing), according to a company announcement.

• Japan’s Prime Minister Kishida said in his video message broadcast at the event that the Japanese government has chosen to support the expansion of JASM in the context of the Domestic Investment Promotion Package announced in December 2023. Other distinguished attendees included Japanese Minister of Economy, Trade and Industry Ken Saito, and Chairman of the Liberal Democratic Party’s group on semiconductor strategy Akira Amari.
• Representatives from key partners such as Sony CEO Kenichiro Yoshida, Denso President Shinnosuke Hayashi, Toyota Chairman Akio Toyoda, and Kajima President Hiromasa Amano also leant their support to the chip-maker’s Japanese subsidiary by attending the factory opening.
• In his speech, TSMC founder Morris Chang recalled being invited to establish the chip factory in Japan back in 2019. Five years later, he said, the factory was a reality, with JASM expected to enhance the resilience of the chip supply chain and contribute to the revitalization of the local semiconductor industry, he said.
• The first plant, backed by a JPY 476 billion ($3.16 billion) subsidy from the Japanese government, will produce chips using 28/16/12-nanometer processes, while the second plant will specialize in 7/6-nanometer processes, according to Taiwanese media outlet Economic Daily News. JASM is expected to start construction of the second plant by the end of this year and be making chips there from the end of 2027.
• TSMC claims that the Japanese government’s investment in JASM will surpass $20 billion, and the establishment of the two fabs will provide at least 3,400 jobs.

Context: Sony, Denso, and Toyota also invested in JASM. Building of the first plant in Kumamoto began in April 2022, as reported by the media outlet Jiwei. 

• TSMC holds around a 70% stake in JASM, with Sony, Denso and Toyota as secondary investors. The plant expects to ramp up to a planned monthly production capacity of 55,000 12-inch chips.

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