Breaking News: TSMC Makes Historic Move with First Plant Opening in Japan

Breaking News: TSMC Makes Historic Move with First Plant Opening in Japan

Taiwan Semiconductor Manufacturing Co. (TSMC) marked a pivotal moment in its global expansion strategy with the official opening of its first semiconductor plant in Japan, situated in the Kumamoto region.

The Japan Advanced Semiconductor Manufacturing (JASM) plant inauguration took place in a ceremony where TSMC Chairman Mark Liu expressed gratitude for the support received from the Japanese government, local community, and key business partners, including Sony and Denso. This move aligns with Japan’s concerted efforts to regain a foothold in the chip production industry.

Japan’s Prime Minister Fumio Kishida, in a congratulatory video message, emphasized the importance of Japan’s friendly relations with Taiwan and the crucial role of cutting-edge semiconductor technology. TSMC, a global chip giant, announced plans for a second plant in Japan earlier this month, with a substantial private sector investment totaling $20 billion for both plants.

Japan had previously committed 476 billion yen ($3 billion) in government funding to encourage TSMC’s investment, and Kishida confirmed a second package, raising Japan’s support to over 1 trillion yen ($7 billion).

While TSMC is concurrently establishing plants in the U.S. and Europe, Japan holds strategic significance due to its geographical proximity to Taiwan and its status as a key U.S. ally. The geopolitical dynamics, with China claiming Taiwan as its territory, add complexity to the decision-making process.

Japan’s semiconductor industry, which was once dominated by companies like Toshiba Corp. and NEC controlling half of the world’s chip production, has seen a decline to under 10%. The recent allocation of approximately 5 trillion yen ($33 billion) reflects Japan’s commitment to revitalize the chip sector, especially in light of the disruptions caused by the coronavirus pandemic.

Investors in TSMC’s Japan plant include Sony Semiconductor Solutions Corp., Denso Corp., and Toyota Motor Corp. TSMC retains an 86.5% ownership stake in JASM. The collaboration with these established companies underscores the significance of TSMC’s investment in Japan.

Upon completion, the two plants are expected to create around 3,400 high-tech jobs directly, contributing positively to the local economy and supporting Japan’s goal of enhancing self-sufficiency in chip production.

Despite facing challenges in chip production, Japan maintains a leading role in specific segments, as exemplified by Tokyo Electron, a company manufacturing machinery used in chip production.

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The Japanese government’s commitment to playing catch-up in the semiconductor industry is evident through its support for various projects nationwide, collaborating with international players like Western Digital and Micron, as well as domestic companies such as Renesas Electronics, Canon, and Sumitomo.

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