TSMC’s fab in Kikuyo, Kumamoto Prefecture, Japan (Kumamoto Fab 1) is expected to begin mass production by the end of 2024, with plans for a second fab in the region. Thus, the influence of TSMC’s presence continues to expand, as per the latest estimates from local financial institutions.

Over the next decade, from now until 2031, the economic spillover effect of TSMC’s operations in Kumamoto is projected to surpass 10 trillion yen, marking a 60% increase from a previous estimate in August 2023.

According to a report from Nikkei citing Kyushu Financial Group (Kyushu FG), a new impact estimate has been released on September 5, showing that TSMC’s operations in Kumamoto Prefecture are projected to generate an economic spillover effect of approximately JPY 11.2 trillion over the next 10 years, until 2031.

This marks a 60% increase from the previous estimate of JPY 6.9 trillion published in August 2023. The projected impact on Kumamoto Prefecture’s GDP over the same period has also risen from JPY 3.4 trillion to JPY 5.6 trillion.

Reportedly, the previous estimate from Kyushu FG last August only considered the benefits of TSMC’s Kumamoto Fab 1. The latest report, however, includes the planned construction of the Kumamoto Fab 2 in its evaluation.

The upward revision is attributed to the expanded magnetic pull of TSMC’s Kumamoto operations (both fabs). The number of companies expected to set up or invest in the region has increased to 171, roughly double the previous estimate.

Initially, the first Kumamoto fab attracted strong interest from suppliers like Sony and Mitsubishi Electric. Following TSMC’s announcement in February to build a second fab, further investments are expected, not only from within Kumamoto but also from other prefectures and overseas suppliers, particularly from Taiwan.

Additionally, the economic impact is expected to extend to wage levels in Kumamoto Prefecture, with an estimated increase of JPY 380,000 in per capita annual income.

Meanwhile, as stated in an report from Bloomberg on May 11th, Kumamoto’s newly appointed governor, Takashi Kimura, once claimed that he would spare no effort to persuade TSMC to establish a third fab in the region.

In addition, a recent report from Kyodo News citing the interview with Taiwanese Minister of Economic Affairs J.W. Kuo has also hinted that TSMC plans to build a third fab in Japan, but with a projected timeline after 2030.

If the third fab is realized, the economic spillover effect is anticipated to expand further.

Read more

• [News] TSMC to Build Third Fab in Japan? The Timing May Be Reportedly after 2030
• [News] TSMC’s Kumamoto Fab 2 Reportedly Begins Land Preparation

(Photo credit: JASM)

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.

Read more

• [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)

As per a report from Economic Daily News, TSMC’s first European 12-inch fab is set to hold its groundbreaking ceremony on August 20. Along with TSMC’s ongoing projects in Japan and the U.S., the investment has amounted to nearly USD 100 billion. Meanwhile, this move is also expected to generate opportunities for supporting Taiwanese contractors.

The new TSMC facility in Dresden, Germany, is anticipated to use 28/22nm planar CMOS and 16/12nm FinFET process, with a monthly production capacity of approximately 40k 12-inch wafers.

Per TSMC’s plan, its fab in Germany will start operation by the end of 2027, with estimated costs exceeding EUR 10 billion (approximately USD 10.8 billion), creating opportunities in plant equipment and engineering sectors.

In response to the demand, Marketech International, a Taiwanese fab tool maker, has already set up offices and accommodations in Dresden in 2023 and has deployed staff there.

Additionally, Topco Scientific, a Taiwanese semiconductor materials distributor, is also said to be planning to establish a presence in Europe, with plans to set up operations in Prague, Czech Republic, about two hours’ drive from Dresden.

On the other hand, TSMC is accelerating the construction of its Kumamoto plant in Japan, with production scheduled to begin by the end of this year. This facility will be the fastest among TSMC’s new overseas fabs to start production. TSMC is also actively advancing the construction of a second Kumamoto plant.

TSMC plans to invest over USD 20 billion in its two Japanese facilities, which are expected to have a combined monthly capacity of over 100k 12-inch wafers. The plants will offer 40nm, 22/28nm, 12/16nm, and 6/7nm process.

Once operational, the Kumamoto plant is anticipated to generate significant opportunities in the semiconductor inspection sector.

MA-tek, a giant in semiconductor inspection and analysis services, is planning to expand its service at its laboratories in Nagoya and Kumamoto, while setting up a third laboratory to fully meet the needs of local semiconductor clients.

As for TSMC’s fab in Arizona, U.S., the company has planned a total capital expenditure exceeding USD 65 billion. Industry sources cited by Economic Daily News have expected that companies like United Integrated Services and Marketech International will continue to benefit from this investment.

Read more

• [News] TSMC Reports No Major Damage to Kumamoto Plant after 7.1 Magnitude Earthquake near Kyushu, Japan
• [News] TSMC’s German Plant Reported to Break Ground in Weeks, Expected to Begin Production by Late 2027

(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.

Read more

• [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 from Nikkei on August 5, RS Technologies, a global giant in recycled wafers, has announced that due to increased orders, it will expand the monthly production capacity of its Japanese and Taiwanese plants to 580,000 wafers by 2024.

Despite the Japanese plant operating at full capacity, the company is still unable to meet the surging demand, prompting it to implement new investment plans to further increase production.

RS Technologies President Fang Yong Yi explained that there are various processes in semiconductor manufacturing, and many of them require repeated quality checks and testing, which utilize reclaimed wafers.

These reclaimed wafers are cleaned and subjected to precise regeneration processes, with each wafer being recyclable about 10 times. The company estimates that global monthly production output of reclaimed wafers will increase by 32% from 1.32 million in 2023 to 1.74 million in 2024.

Regarding TSMC’s new plant in Kumamoto Prefecture, which hints at a resurgence in semiconductor production within Japan, Fang noted that in 2023, orders for reclaimed wafers from major Japanese semiconductor companies like Kioxia significantly declined. However, in 2024, orders are expected to increase by 10,000 to 20,000 wafers month by month.

For 2024, the combined monthly production of RS Technologies’ Japanese and Taiwanese plants is projected to rise from 540,000 in 2023 to 580,000.

Reportedly, the Japanese plant is currently operating at full capacity with a 24-hour, three-shift system but still cannot meet demand. The plant’s current monthly production is 320,000 wafers, and new equipment investments are planned to add 170,000 wafers to the monthly capacity soon.

Fang further noted that orders for recycled test wafers from overseas vendors have also increased. New plants require a large volume of test wafers, and thus the simultaneous construction of new plants by overseas manufacturers represents a significant opportunity for the company.

RS Technologies, in a financial report released on May 13, announced plans to expand its overall monthly production capacity of reclaimed wafers to over 890,000 units by the end of 2026 to meet strong demand.

Read more

• [News] Japan’s “Silicon Island” Reawakening? Taiwanese Semiconductor Companies Follow TSMC to Kyushu
• [News] TSMC’s JASM Kumamoto Plant 2 Greenlit, Construction Expected to Commence by Year’s End