The new chip plant in Kumamoto, Japan, operated by Japan Advanced Semiconductor Manufacturing (JASM), a joint venture between Taiwan Semiconductor Manufacturing Co. (TSMC), Sony, and Denso, is poised for substantial capacity growth.

JASM President Yuichi Horita revealed that after commencing production in the fourth quarter of 2024, the plant’s production capacity will gradually ramp up, targeting a full capacity of 55,000 12-inch wafers per month.

Simultaneously, TSMC aims to enhance Japan’s semiconductor supply chain and ecosystem, looking to a 60% local contribution by 2030, a significant increase from the current 25%.

Yuichi Horita unveiled the latest plan for TSMC’s Kumamoto plant during his speech at the SEMICON Japan. He emphasized that TSMC’s Kumamoto plant is actively working to establish a local supply chain and ecosystem in Japan.

The current proportion of equipment and materials sourced from Japan for the Kumamoto plant is approximately 25%. The goal is to increase this to 50% by 2026 and achieve 60% by 2030. The progress in constructing production capacity, trial production, and mass production is in line with the original plan.

Yuichi Horita stated that the current workforce at the Kumamoto facility stands at 1,700 employees. Among them, around 600 are dispatched by TSMC and Sony, with the remaining being newly recruited staff.

The production capacity of the new Kumamoto plant primarily focuses on 28/22 nanometers and 16/12 nanometers. In the initial phase, the majority of the capacity is allocated to the manufacturing of Image Signal Processor (ISP) used in CMOS image sensors, as part of Sony’s outsourcing.

The remaining capacity is dedicated to automotive parts supplier Denso, where they outsource the production of automotive microcontroller unit (MCU), with Denso reportedly able to obtain approximately 10,000 wafers per month.

Reportedly, in industry analysis, although Japan’s recent performance in foundry has not matched that of Taiwan, South Korea, and China, Japan’s semiconductor equipment supply chain is already quite mature and comprehensive.

Major players in the field, such as Nikon in lithography equipment, and Hitachi High-Tech, renowned for etching equipment and critical dimension scanning electron microscopy (CD-SEM), have established dominance.

Additionally, Japanese companies specializing in chemical solutions, gases, and materials have also secured significant positions. All of these factors make them crucial partners for supporting the development of TSMC’s Kumamoto plant in the future.

Industry source suggests that in the future, the Japanese government will not only continue to subsidize semiconductor manufacturing but also strengthen collaboration between the semiconductor industry and academia to attract more talent into the semiconductor industry.

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• [News] TSMC’s Kumamoto Plant Prepares for 2024 Mass Production with 1000+ Employees, Followed by Taiwanese Material Suppliers’ Collaboration
• [News] Rumored to Build Third Plant in Kumamoto, TSMC: Currently Focusing on Assessing the Construction of a Second Plant

(Photo credit: TSMC)

According to Bloomberg’ report, TSMC is contemplating the construction of its third wafer fabrication plant in Kumamoto, Japan, focusing on the 3-nanometer manufacturing process. This move could position Japan as a global hub for semiconductor manufacturing.

After being inquired by Taiwan’s media, Economic Daily News, TSMC responded on November 21 to these rumors, stating that the expansion of the company’s global manufacturing footprint is driven by factors such as customer demand, business opportunities, operational efficiency, government support, and economic considerations.

In the response, TSMC also mentioned that it continues to make necessary investments to support customer needs and address the structural growth in semiconductor technology’s long-term demand. Currently, the company is actively evaluating the possibility of establishing a second wafer fabrication plant in Japan, with no additional information available for sharing.

Bloomberg reports that TSMC has informed its supply chain partners about considering the construction of a third plant in Kumamoto, codenamed ” TSMC Fab-23 Phase 3,” but the commencement date remains uncertain.

Analyst Joanne Chiao from TrendForce points out that Japan’s expertise in materials and machinery is one of the factors attracting TSMC’s expansion. Japan stands to benefit from TSMC’s establishment as the pace of creating a local semiconductor ecosystem by Japanese government surpasses that of the U.S. government.

In addition to TSMC, Japan has successfully attracted investments from Micron, Samsung, and Powerchip Semiconductor Manufacturing Corporation (PSMC). Japanese government is also assisting the local Rapidus in constructing a 2-nanometer chip plant in Hokkaido.

TSMC’s current overseas facility receiving the largest subsidy is its first new plant in Kumamoto, Japan. TSMC holds the majority of shares in the Kumamoto plant and collaborates with customers and Japanese officials through joint ventures with Sony Semiconductor Solutions Corporation and DENSO Corporation, investing in the plant’s subsidiary, JASM. The plant is set to enter mass production by the end of 2024, producing chips in 22/28-nanometer and 12/16-nanometer processes.

Due to strong support from Japanese authorities, TSMC’s capital expenditure for its first new plant in Kumamoto has increased from $7 billion to $8.6 billion. The Japanese Ministry of Economy, Trade, and Industry approved a subsidy of JPY 476 billion (approximately USD 3.5 billion) in June of the previous year, translating to 40% of the total capital expenditure of TSMC’s new facility.

Following the confirmation of an expanded subsidy program by Japanese authorities, TSMC is planning to build a second wafer fabrication plant near the first one. Rumors suggest that as early as 2025, TSMC may introduce Extreme Ultraviolet (EUV) lithography machines for production in processes below 7 nanometers.

(Photo credit: TSMC)

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• [News] TSMC’s Kumamoto Plant Prepares for 2024 Mass Production with 1000+ Employees, Followed by Taiwanese Material Suppliers’ Collaboration
• [News] Japanese Gov’t Grants TSMC 900B Yen, Kumamoto Fab 2 Announcement Soon

Akira Amari, a Japanese lawmaker and leader of the parliamentary association to promote semiconductor strategy, reveals that Japan is gearing up to allocate a subsidy of up to 900 billion yen for the second-phase expansion of TSMC’s Kumamoto fab. The plan involves transitioning from the 22/28 nm and 12/16 nm processes to the more advanced 7 nm process. Once completed, Japan is anticipated to emerge as the leading semiconductor supply hub globally.

Media reports suggest that the cabinet amendment is expected to allot a total of 1.9 trillion yen for semiconductor subsidies in Japan. Japanese companies are slated to receive 590 billion yen, while TSMC’s second-phase expansion project in Kumamoto is in line for the highest subsidy of 900 billion yen, surpassing the market’s earlier projection of 760 billion yen.

Highlighting the unprecedented nature of this subsidy, Amari underscores the imperative of ensuring companies’ operational profitability. Japan envisions becoming a pivotal player in the semiconductor supply chain. Furthermore, contingent on the development scenario, the government is committed to evaluating subsidy reductions, with a pledge to support various schemes for establishing Japan as a long-term semiconductor hub.

As of now, the construction of TSMC’s first-phase fab in Kumamoto is advancing rapidly, with the total workforce anticipated to surpass a thousand. The team is preparing for a timely production launch in 2024.

Although the Kumamoto fab’s announcement and construction preceded that of the U.S. Arizona fab, set to commence production in 2025, TSMC’s Kumamoto fab is garnering robust support from official Japanese channels and partners including SONY Semiconductor Solutions and Denso. The fab is set to utilize 22/28 nm and 12/16 nm processes, with a total capital expenditure of 8.6 billion USD. The Japanese Ministry of Economy, Trade and Industry(METI) granted approval for a subsidy of 476 billion yen in June 2022, which represents approximately 40% of total capital expenditure is supported by the subsidy.

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• [News] Japanese Lawmaker Confirms Additional ¥900 Billion Subsidies for TSMC’s Kumamoto 2nd Fab
• [News] TSMC’s Global Expansion: Progress in New US, German, and Japanese Fabs

TSMC’s new plant in Kumamoto, Japan, is bustling. With more than a thousand employees hard at work, it is on track to commence mass production in 2024. This venture signifies TSMC’s commitment to meet customer demands and navigate geopolitical challenges by expanding its overseas production capabilities.

According to a report by Economic Daily, industry sources reveal that TSMC’s Kumamoto plant is making significant progress in terms of staffing. In August 2023, Taiwanese engineers arrived in Japan accompanied by their families. Simultaneously, locally recruited engineers have completed training and are being deployed to the Kumamoto plant in preparation for the 2024 production.

Notably, TSMC’s Kumamoto plant has successfully trained its workforce. When combined with local employees, the facility now boasts a workforce exceeding a thousand. For the latest Kumamoto plant updates, TSMC assures to refer to the information shared during the October 3Q23 earning conference.

In the prior conference, TSMC disclosed its construction of a cutting-edge wafer fab in Japan. This fab will employ 12/16 nm and 22/28 nm process technologies. TSMC has hired around 800 local employees, most of whom have gained valuable experience in Taiwan. Equipment installation began this month, and mass production is expected by late 2024 if all goes according to schedule.

TSMC’s Kumamoto plant is strongly supported by the Japanese government, Sony Semiconductor Solutions Corporation, Denso, and other partners. The plant’s total capital expenditure is $8.6 billion, and the Japanese Ministry of Economy, Trade and Industry approved a subsidy of 476 billion yen (about US$3.5 billion) in June, covering around 40% of the total Japanese subsidy amount.

The Japanese government is optimistic about TSMC introducing EUV lithography equipment for advanced process mass production in future plants. To secure TSMC’s expansion of the Kumamoto Plant, the government is intensifying its support, with discussions suggesting subsidies of up to 900 billion yen (about US$6.03 billion). This increase underscores Japan’s commitment to boosting domestic semiconductor production value, aligning with their 2030 goal. Companies like TSC, WAHLEE, and MA-tek are poised to expand in pursuit of this goal.

TSC established Shunkawa Co., Ltd. in Japan in 2022 and opened a Kumamoto office in August this year. TSC plans to closely monitor the evolution of new semiconductor plants and explore expansion opportunities in regions such as Tohoku and Hokkaido. Additionally, WAHLEE, a materials distributor, is actively partnering with original equipment manufacturers and Japanese trading companies to tap into the Japanese market.

(Image: TSMC)