TSMC leads multi-billion dollar expansion with second fab in Kumamoto, Japan

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In a significant move to address the escalating demand for semiconductors, TSMC (TWSE: 2330, NYSE: TSM), together with Sony Semiconductor Solutions Corporation (“SSS”), DENSO Corporation (“DENSO”), and Toyota Motor Corporation (“Toyota”), has announced an additional investment into Japan Advanced Semiconductor Manufacturing, Inc. (“JASM”), TSMC’s majority-owned subsidiary located in Kumamoto Prefecture, Japan. This investment is aimed at constructing a second fabrication plant (fab), which is projected to commence operations by the end of 2027. This strategic expansion is expected to push the total investment in JASM beyond the US$20 billion mark, with substantial backing from the Japanese government.

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The decision to erect a second fab, scheduled to start construction by the end of 2024, comes as a direct response to the growing customer demand for semiconductors. This expansion will not only escalate the production scale but also enhance the cost structure and supply chain efficiency for JASM. Upon completion, the Kumamoto site’s two fabs will boast a total production capacity exceeding 100,000 12-inch wafers per month. This capacity will support a range of process technologies—40, 22/28, 12/16, and 6/7 nanometers—catering to automotive, industrial, consumer, and high-performance computing (HPC) applications. Moreover, the production capacity may be further refined based on customer demands, ensuring agility and responsiveness to market needs.

Major Semiconductor Players TSMC, Sony, DENSO, and Toyota Amplify Investment in Japan's Chip Manufacturing

Major Semiconductor Players TSMC, Sony, DENSO, and Toyota Amplify Investment in Japan’s Chip Manufacturing

The equity stakes resulting from this investment see TSMC holding approximately 86.5%, SSS at 6.0%, DENSO with 5.5%, and Toyota at 2.0% in JASM, respectively. The successful closure of this transaction, pending customary conditions, marks a significant milestone in the semiconductor industry, showcasing the collaborative efforts of leading global corporations to bolster chip manufacturing capabilities.

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This ambitious project not only underscores the strategic importance of the semiconductor industry but also highlights the commitment of TSMC, SSS, DENSO, and Toyota to supporting the global technology infrastructure. With the anticipated creation of over 3,400 high-tech professional jobs, the initiative stands as a testament to the sector’s potential to drive economic growth and technological innovation. The Kumamoto site’s expansion is a clear indicator of the semiconductor industry’s pivotal role in shaping the future of automotive, industrial, consumer electronics, and computing technologies.

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