19 Feb 2024 -

Chip giant TSMC doubles down on Japan with second factory

japan semiconductor fab

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading chipmaker, is expanding its presence in Japan with plans to build a second factory. This move comes in response to surging demand and is part of a broader global push to fortify semiconductor supply chains.

The new $20 billion facility will be built by TSMC’s subsidiary, Japan Advanced Semiconductor Manufacturing (JASM), and is expected to be operational by late 2027. It will be located next to JASM’s first factory, currently under construction and set to open this year. This expansion is backed by significant financial support from the Japanese government, highlighting the country’s strategic focus on securing domestic chip production.

TSMC is a crucial player in the global semiconductor industry, manufacturing 90% of the world’s most advanced chips. Its products are vital for a wide range of electronics, from smartphones and laptops to microwave ovens and washing machines. Recent chip shortages have underscored the importance of resilient supply chains, prompting governments and companies alike to invest heavily in domestic production.

The Japanese expansion isn’t TSMC’s only international move. The company is also expected to build factories in Germany and the United States, demonstrating a commitment to diversifying its manufacturing footprint. This global push is expected to create thousands of jobs, with TSMC estimating that its two Japanese plants alone will generate around 3,400 skilled positions.

Major Japanese corporations like Toyota and Sony are also involved in the project, showcasing the nation’s collective effort to strengthen its semiconductor industry. This significant investment by both the government and private sector reflects Japan’s determination to become a major player in the global chip race, challenging the dominance of traditional leaders like the US and South Korea.

While the future of the global chip market remains uncertain, TSMC’s expansion in Japan signifies a clear trend: countries are increasingly prioritizing domestic chip production to ensure their technological and economic security. This shift is likely to have a profound impact on the industry’s landscape, potentially leading to a more geographically diverse and resilient supply chain in the years to come.

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