TOKYO/TAIPEI, Feb 5 (Reuters) – TSMC plans to mass produce advanced 3-nanometre chips in Kumamoto in southern Japan, TSMC CEO C.C. Wei said on Thursday, an investment local media reported was worth $17 billion as the Taiwanese firm seeks to meet soaring demand for AI chips.
TSMC, the world’s largest contract chipmaker and a key supplier of AI chips to companies such as Nvidia, currently produces its most advanced chips in Taiwan. Previous plans for Japan had focused on less advanced technologies.
The announcement puts Japan on the map as the newest location for the production of the high-end 3-nanometre chips, which are widely used in high-performance computing and AI servers. The company plans to begin producing these chips at its second fab in Arizona in 2027.
The boom in AI has helped TSMC, Asia’s most valuable listed company, outshine its rivals.
“We believe this fab will further contribute to the local economic growth and, most importantly, form a foundation for Japan’s AI business,” said Wei in Tokyo at a meeting with Japan’s Prime Minister Sanae Takaichi.
Wei added that the company was also in discussions with Japanese customers and partners on further collaboration across multiple areas important to the AI industry.
Takaichi said 3-nanometre chips hold great significance for economic security.
TSMC told Reuters in an email that the company is now planning to use 3nm process technology for production at its second fab in Japan to meet strong demand driven by AI.
Japanese newspaper Yomiuri reported earlier on Thursday that the investment will be $17 billion. TSMC declined to comment on the reported investment figure.
Japan’s government, which has subsidised Taiwan’s leading chipmaker to build out capacity in Kyushu, is considering additional support for the new investment plan, Yomiuri reported.
TSMC had planned to invest $12.2 billion on 6-12 nanometre chipmaking capacity at its second fab in Kyushu but will discuss changes to the plan with Japan’s government, Yomiuri reported.
The company said on an earnings call in January that the construction of its second fab in Japan has started, and “the technologies and ramp schedule will be based on our customers’ need and market conditions.”
Japan is also heavily subsidising homegrown foundry venture Rapidus, which will produce cutting-edge chips on the northern island of Hokkaido.
The government has determined the two companies’ chips will have different uses and will not be in competition, Yomiuri reported.
Securing access to chips, which are critical for electronics, automotive and defence industries, has become a priority for governments around the world.
(Reporting by Kantaro Komiya, Wen-Yee Lee and Sam Nussey; Editing by Chris Reese and Shri Navaratnam)
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