On Tuesday evening, Beijing time, Taiwan Semiconductor Manufacturing Company (TSMC), the world's leading semiconductor manufacturer, issued an announcement announcing an increase in capital for overseas subsidiaries in Japan and the United States, as well as the long-awaited "Japanese second factory."

According to the resolution of TSMC’s board of directors,It was approved to increase the capital of Japan Advanced Semiconductor Manufacturing Company (JASM) to a limit of no more than 5.262 billion U.S. dollars, and it was also approved to increase the capital of 100%-owned subsidiary TSMCArizona to a limit of no more than 5 billion U.S. dollars.


(Source: TSMC official website)

The placement of “Japan’s second factory”

As the Kumamoto Prefecture factory officially announced by TSMC and Sony in 2021 will be put into production this year, the "Japanese second factory" that has been rumored for a long time in the market also officially came to the stage today. In addition to Sony and Denso, which have already participated in investments, Toyota Motor Corporation will also take a minority stake in JASM.

After the latest round of investment, TSMC will hold 86.5% of JASM's equity, while Sony, Denso and Toyota Motor will hold 6%, 5.5% and 2% respectively.

TSMC revealed that with the support of Japanese government subsidies, JASM’s total investment amount will also rise to US$20 billion. It has also been previously reported that the capital expenditure of the "Kumamoto Factory II" is approximately 2 trillion yen (approximately 13 billion U.S. dollars), of which the Japanese government is considering providing 900 billion yen in subsidies.


(Source: TSMC official website)

Judging from the announcement, TSMC’s “Japanese Second Factory” will also further improve Japan’s domestic semiconductor process. As we all know, before TSMC invested in Japan, the most advanced chip technology the country could produce was only 40nm. The Kumamoto factory, which will be put into production within the year, has a planned production capacity of 55,000 12-inch wafers per month.Using 22/28nm to 12/16nm process. It was previously reported that the Kumamoto Factory No. 1 will hold an opening ceremony on February 24, but large-scale mass production will still have to wait until the end of the year.

According to TSMC's description, the new factory will begin construction at the end of this year and be put into production in 2027. With the second Kumamoto plant put into operation, the production capacity of the entire JASM Kumamoto plant will reach 100,000 pieces of 12-inch wafers per month, and it will also be able to provide6/7nm process technology.

TSMC also stated that subsequent specific production capacity planning will still depend on customer demand for adjustments. Teruji Shimizu, president of Sony Semiconductor, said in June last year that the production capacity of the Kumamoto plant, which will be put into operation in 2024, will not be able to meet even Sony’s semiconductor needs.

"Japan's third factory" also started to probe

There is no doubt that even the 6/7nm process is a technology that was developed several years ago. At present, major manufacturers such as Apple, Samsung, and Nvidia have collectively moved towards 3nm. At the same time, a number of foundries are also at a critical node in breaking through 2nm mass production. At this juncture, TSMC is also already considering expanding 3nm process production to Japan.

According to news at the end of last year,TSMC has informed its supply chain partners that it is considering building a "Kumamoto Factory No. 3" capable of producing 3nm chips. According to rough expectations, a 3nm factory may require an investment of US$20 billion, and in order to ensure that advanced processes come to Japan, the Kishida Fumio government is likely to continue to provide subsidies close to half of it.

With the Japanese government's generous subsidies (and the Biden administration's delay in disbursing subsidies), Micron, Samsung Electronics, and LJD have announced plans to invest in Japan. At the same time, Rapidus, the local "chip national team" supported by the Japanese government, is also working towards "locally produced 2nm chips."