Taiwanese Minister of Economic Affairs J.W. Kuo, who was invited to visit Japan, attended a forum on August 30 organized by the Taiwan-Japan Research Institute and delivered a keynote speech. As reported by Kyodo News citing the interview with Kuo, he indicated that TSMC plans to build a third fab in Japan, but with a projected timeline after 2030.

However, Kuo emphasized that the final decision on whether to proceed with the expansion in Japan rests with TSMC, and he refrained from discussing specific site locations.

In addition, in response to Kuo’s comments, the Ministry of Economic Affairs clarified that any details regarding TSMC’s potential third fab should be confirmed with the foundry giant itself.

Reportedly, Kumamoto Prefecture Governor Takashi Kimura visited TSMC’s headquarters on the afternoon of August 26 and held talks with TSMC’s senior executives.

Notably, Takashi Kimura, who took office in April, stated in an report from Bloomberg on May 11th that he would spare no effort to persuade TSMC to establish a third fab in the region, believing that during the preparations for TSMC’s first fab in Kumamoto, the region already possesses better-quality road and water infrastructure and an education system that better supports international school students, which could be advantageous.

TSMC’s fabs in Kikuyo Town, Kumamoto Prefecture (Kumamoto Fab 1) is set to begin mass production in Q4 (October-December), utilizing 28/22nm and 16/12nm process technologies, with a monthly production capacity of 55,000 wafers.

The Kumamoto Fab 2 is scheduled to begin construction at the end of 2024, with the goal of starting operations by the end of 2027, focusing on 6/7nm processes. The combined monthly production capacity of TSMC’s Kumamoto fab 1 and 2 is estimated to exceed 100,000 wafers.

TSMC Chairman C.C. Wei mentioned in June that after the successful operation of the first and second fabs, TSMC would consider building a third fab if it receives the approval of the local residents.

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• [News] TSMC Reports No Major Damage to Kumamoto Plant after 7.1 Magnitude Earthquake near Kyushu, Japan
• [News] TSMC’s Kumamoto Fab 2 Reportedly Begins Land Preparation

(Photo credit: TSMC)

On August 8th, Japan experienced a magnitude 7.1 earthquake with the epicenter located off the coast of Kyushu, in the sea east of Miyazaki Prefecture, at a focal depth of 30 kilometers. TSMC’s Kumamoto plant (JASM), located in Kumamoto Prefecture, experienced a seismic intensity scale of level 4.

As per a report from Commercial Times, regarding the impact of the earthquake, TSMC stated that the seismic intensity scale at the Kumamoto plant did not reach the evacuation threshold and is not expected to impact operations.

The schedule for its Kumamoto fab to start mass production in the fourth quarter remains unaffected, and construction work on the second plant has already begun. Kumamoto Prefecture Governor Takashi Kimura is scheduled to visit Taiwan at the end of August to actively seek a third plant.

TSMC’s first JASM plant in Kumamoto is set to start mass production in the fourth quarter, focusing on 12nm and 16nm processes. Construction work on the site for the second plant began at the end of the second quarter, with the building scheduled to break ground in the second half of the year.

Notably, Takashi Kimura, who took office in April, stated in an report from Bloomberg on May 11th that he would spare no effort to persuade TSMC to establish a third fab in the region, believing that during the preparations for TSMC’s first fab in Kumamoto, the region already possesses better-quality road and water infrastructure and an education system that better supports international school students, which could be advantageous.

Kyushu is a key region for Taiwan’s semiconductor industry. Recently, ASE Group, a leading packaging and testing company, decided to purchase land and establish a plant in Kitakyushu.

Testing company MA-tek, semiconductor materials distributor Topco Scientific, and Gudeng Precision have all set up bases in Kumamoto, while Gudeng is also planning to establish a new plant in Kurume, between Fukuoka and Kumamoto.

TSMC has indicated that most of its production sites, suppliers, customers, and upstream suppliers of semiconductor manufacturing services are located in areas susceptible to natural disasters.

Thus, to mitigate the risks that could lead to operational disruptions, TSMC has reportedly strengthened its ability to effectively respond to these risks through business continuity management to ensure operational resilience across its supply chain.

Commercial Times reported that from the very beginning of construction, TSMC has been reinforcing building structures, facilities, and equipment, along with implementing preventive measures. This is done to ensure that the plant remains undamaged, with no chemical leaks, equipment displacement, or injuries to personnel.

The evacuation standards for JASM are consistent with those of TSMC’s other plants in Taiwan. The recent earthquake did not meet the threshold for evacuation, so it is not expected to impact operations. This event also served as a stress test before mass production begins, the report noted.

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• [News] TSMC’s Kumamoto Fab 2 Reportedly Begins Land Preparation
• [News] Kumamoto Vying for TSMC’s Third Fab, Looking to Build Semiconductor Hub

(Photo credit: TSMC)

According to a report by the Commercial Times, while TSMC, the global foundry leader, has established a plant in Kikuyo, Kumamoto City, Kyushu. ASE Technology Holdings (ASE), a giant in packaging industry, is setting up a plant in Kitakyushu as well. With these developments, Japan’s semiconductor production could potentially integrate both front-end and back-end processes, forming a cluster within Kyushu.

This development could lead to a revival of Kyushu’s semiconductor industry, once known as the “Silicon Island” in Japan, attracting more semiconductor supply chain companies to the region.

The report further notes that related equipment and inspection company, including MA-tek, semiconductor transmission and storage solutions provider Gudeng Precision, and semiconductor material distributor Topco Technologies Corp. (Topco) have all established bases in Kumamoto.

MA-tek, a leader in semiconductor inspection and analysis services, established its first Japanese laboratory in 2019 and a second one in Kumamoto in 2023. Since their establishment, these laboratories have consistently achieved growth rates higher than the company average.

With the rise of AI applications, many Japanese clients have AI chip development projects, leading to increased demand for MA-tek’s materials analysis (MA) and advanced process inspection services.

To capitalize on advanced process and packaging opportunities brought by AI, the company MAT has decided to increase its capital expenditure this year to between NTD 1.2 billion and NTD 1.4 billion.

These funds will be used to expand and upgrade the testing equipment and laboratory facilities in Nagoya and Kumamoto, and to establish a third laboratory in Hokkaido, which is expected to start contributing to revenue in Q1 2025.

On the other hand, Gudeng Precision is also planning to build a new plant in Kurume in Q2 this year, located between Fukuoka and Kumamoto, with a planned area of approximately 3,000 ping (about 10,000 square meters).

Gudeng Precision’s investment in Kurume, Japan, including equipment procurement, is estimated at about NTD 400 million to NTD 450 million. Construction is expected to begin by the end of this year, with production slated to start by the end of 2025.

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• [News] TSMC’s JASM Kumamoto Plant 2 Greenlit, Construction Expected to Commence by Year’s End
• [News] Kumamoto Vying for TSMC’s Third Fab, Looking to Build Semiconductor Hub

(Photo credit: JASM)

TSMC officially gives the green light to the second fab in Kumamoto, Japan! On January 6th, TSMC, Sony Semiconductor Solutions Corporation (SSS), DENSO Corporation (DENSO), and Toyota Motor Corporation (Toyota) jointly announced further investment in TSMC’s Japanese subsidiary, Japan Advanced Semiconductor Manufacturing, Inc. (JASM).

The collaboration is expected to construct JASM’s second fab in Japan, dedicated to the 6/7-nanometer advanced process. The new facility is expected to commence operations by the end of 2027, with a total investment exceeding USD 20 billion, strongly supported by the Japanese government.

TSMC has stated that in this investment venture with JASM, TSMC, SSS, DENSO, and Toyota hold approximately 86.5%, 6.0%, 5.5%, and 2.0% of JASM shares, respectively. Toyota Motor Corporation is a new major shareholder following this capital increase, indicating its potential involvement in automotive electronics initiatives.

TSMC has further indicated that the construction of JASM’s second fab in Japan is set to commence at the end of 2024. The expansion in production capacity is expected to optimize overall cost structure and supply chain efficiency.

With two fabs in Kumamoto, TSMC anticipates in the press release that JASM’s total monthly production capacity will exceed 100,000 12-inch wafers, offering process technologies ranging from 40nm, 22/28nm, 12/16nm, to 6/7nm for automotive, industrial, consumer, and high-performance computing (HPC) applications. Capacity planning may be further adjusted based on customer demand.

For JASM’s first fab, it is planned to commence production by the end of the year. The initial facility, costing USD 8.6 billion, received subsidies of JPY 478 billion (approximately USD 3.23 billion) from the Japanese government.

The primary process of the first fab are 22/28nm and 12/16nm, with a monthly production capacity of around 50,000 12-inch wafers. Located in Kikuyo-cho, Kikuyo-gun, Kumamoto Prefecture, Kyushu, construction of the facility was announced in November 2021, ground was broken in April 2022, and construction was completed within two years.

JASM’s first fab is set to open on February 24, 2024, with mass production scheduled by the end of the year. The facility is a joint venture between Taiwan and Japan, with TSMC holding the majority of shares, Sony Semiconductor Manufacturing Corporation (SSMC) of Japan holding approximately 20%, and Toyota Group’s DENSO holding about 10%.

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• [News] TSMC Reportedly Announcing Kumamoto Plant 2 in Japan, while U.S. Subsidies Expected by End of March
• [News] Multiple Fabs in Japan to Commence Production Post-2024 Boosting Industry

In 2024, TSMC’s global expansion continues at full throttle, with industry reports suggesting a significant breakthrough in the establishment of a 3-nanometer advanced process manufacturing facility in Japan. Osaka is considered the most likely location for TSMC’s third plant in Japan.

TSMC has stated that it is actively evaluating suitable sites for construction and is not ruling out any possibilities.

According to Taiwan’s Commercial Times, following the announcement of Chairman Mark Liu’s retirement, speculation arises that President CC Wei will shoulder the responsibility of overseas expansion. With domestic 1.4 and 2-nanometer plans settled, and 3-nanometer production achieving high yields, developments in the U.S., Japan, Germany, and elsewhere are progressing rapidly.

Furthermore, sources in the supply chain reveal that TSMC has design centers in Osaka and Yokohama, making Osaka the front-runner for TSMC’s third plant in Japan.

Market speculations suggest that Japan will be a focal point for TSMC’s overseas expansion, with advanced processes and packaging potentially making significant strides in the country. Supply chain insiders point out that TSMC’s two R&D centers in Japan specializing in advanced process research and supporting design services for Japanese IDM customers. The advantageous conditions in Osaka are seen as superior to those in Yokohama.

TSMC’s subsidiary, Japan Advanced Semiconductor Manufacturing (JASM), is constructing a factory in Kikuyo Town, Kumamoto Prefecture, Japan, set to open on February 24 and expected to commence mass production by the end of 2024.

The second factory in Kumamoto is also planned to start operations in April. As for TSMC’s Taiwan facilities in advanced processes, the estimation is for 2-nanometer production to begin in Baoshan and Kaohsiung, gradually reaching mass production by 2026.

(Image: TSMC)