TSMC Diversifying Chip Production to Japan
Taiwan Semiconductor Manufacturing Co TSM is endeavoring to expand its chip production by constructing a second factory in Japan. This strategy demonstrates the company’s commitment to diversifying chip manufacturing beyond its home base in Taiwan.
The new facility in Kumamoto prefecture is expected to be operational by the end of 2027. It will produce 6-nanometer chips, signifying a significant technological advance for chip manufacturing in Japan.
Global Expansion and Diversification
The company’s initiative to build factories in Japan, Arizona, and Germany for chip production reflects a strategic move to mitigate risk and expand its global footprint. The facilities are earmarked for manufacturing chips ranging from 4 to 28 nanometers, with the aim of increasing TSMC’s production capacity outside Taiwan to 300,000 wafers a month by 2028.
Commitment to Taiwan and Agile Response
Despite its global expansion, TSMC remains steadfast in maintaining the production of its most advanced chips in Taiwan. The company is planning to scale up production of next-generation 2-nanometer chips in Hsinchu next year. It is also repurposing a facility initially intended for legacy chips in Kaohsiung for 2-nanometer fabrication, demonstrating its agile response to the surging demand for generative artificial intelligence technologies.
Investment in Japan’s Semiconductor Technology Center
Japan is making substantial investments, with an allocation of up to ¥45 billion ($300 million) to support the Leading-edge Semiconductor Technology Center (LSTC) in developing advanced chip technologies. The Ministry of Economy, Trade, and Industry (METI) has also sanctioned outsourcing research on state-of-the-art fabrication technologies to LSTC, a collective of Japanese researchers specializing in nanotechnology, materials, and artificial intelligence.
Market Performance
Amid this expansion and technological advancement, TSMC’s shares traded higher by 0.76% at $134.74 premarket on the last check Friday. The company’s stock gained over 38% last year, reflecting the robust demand for AI technologies.
Conclusion
TSMC’s foray into Japan represents a bold move to cement its global tech leadership. The company’s efforts to diversify and expand chip production are crucial for enhancing resilience in the face of geopolitical and economic challenges. By bolstering its presence in Japan and other global locations while remaining committed to its roots in Taiwan, TSMC is poised to maintain its position as a key player in the semiconductor industry.