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TSMC Japanese fab planning exposure

Sunday,Jul 25,2021

 Nikkei Asia is informed that TSMC is deciding to put its first chip factory in Japan into operation as early as 2023.

People familiar with the matter told Nikkei Asia that the planned plant in Kumamoto, Kyushu, western Japan, will be carried out in two phases. The board of directors of TSMC, the world's leading chip manufacturer, is expected to determine the investment this quarter.
 Once both phases are in production, the new factory will be able to produce approximately 40,000 wafers per month using 28-nanometer technology, which is widely used in many types of chips, including image processors and image processors used in automotive applications and consumer electronics. Microcontroller unit.
The plant is expected to be mainly used to manufacture image sensors for Sony, TSMC’s largest Japanese customer. Nikkei News learned that TSMC is open to cooperation, which will give Sony more say in operating factories and negotiating with the Japanese government.
According to sources, TSMC’s decision is still affected by a variety of factors, including incentives and support from the Japanese government, and local suppliers’ commitment to building chip-related infrastructure and developing the supply chain.
Sony declined to comment. TSMC reiterated that it told investors on July 15 that it was conducting due diligence on a fab in Japan, which confirmed the earlier report by Nikkei Asia. TSMC said it has no further details.
TSMC Chairman Mark Liu said that the decision whether to continue to build a factory in Japan will be based on "customer needs, operational efficiency and cost economy." The investment in the Kumamoto plant may be far less than the US$12 billion spent by TSMC to build a plant in Arizona, USA, which will use more advanced 5 nanometer technology. In 2020, the United States accounted for more than 60% of the chip manufacturer’s revenue, while Japan accounted for less than 5%.
TSMC, whose major customers include Apple, Google and Facebook, is also expanding its plant in Nanjing, China.
 Liu stated that the company needs to expand its global production footprint in order to remain competitive and provide services to customers, especially as the demand for secure semiconductor delivery continues to grow in the ever-changing geopolitical environment.
Due to national security concerns and unprecedented shortages of exposing supply chain vulnerabilities, China, the European Union, Japan, and the United States are all working hard to transfer important semiconductor production to their homeland.
This Japanese factory will further deviate from TSMC’s original strategy of concentrating chip production in Taiwan, China. The company's founder and former chairman, Morris Chang, recently warned that efforts to relocate chip production to the country may be costly and fail to achieve the self-sufficiency sought.