TSMC will receive $4.9 billion in subsidies from Japan to build a second chip factory

Japan said it would give TSMC up to 732 billion yen ($4.86 billion) more in subsidies to help it build a second chip manufacturing plant, as the Taiwanese company on Saturday marked the opening of its first Japanese factory.

TSMC’s decision to make chips in Japan has become a key component of Tokyo’s drive to revive advanced semiconductor manufacturing and harden its industrial supply chains against disruptions as tensions with neighboring China rise.

“The chips will be more advanced than the first factory and will be able to be used for AI and autonomous driving and will ensure that we have a stable supply of semiconductors in Japan,” Economy, Trade and Industry Minister Ken Saito told reporters after attended a ceremony to open the first factory in Kumamoto on the Japanese island of Kyushu, hosted by TSMC founder Maurice Chang.

The latest financial commitment, which will add to the money given to the world’s largest chipmaker for its first factory, could push TSMC’s taxpayer-funded subsidy past ¥1 trillion.

TSMC, which is also expanding in the US and Germany, plans to move to mass production in Japan before the end of the year. Total investment in the venture, including a second plant, will exceed more than $20 billion, according to the Taiwanese company.

When completed, monthly capacity at the two factories will exceed 100,000 12-inch wafers, which TSMC will supply to technology firms and automakers including Sony and Toyota Motor.

Japan has also invested in a native chip company, Rapidus, which has partnered with IBM and Imec, a European chip research organization, in an attempt to mass-produce cutting-edge chips on the northern island of Hokkaido from 2027.

© Thomson Reuters 2024

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