Semiconductor Equipment

TSMC to begin Japanese fab construction

21 April 2022

Taiwan Semiconductor Manufacturing Co. (TSMC) will start construction on its new semiconductor fab in Japan.

The world’s largest foundry is conducting an interesting experiment with the Japanese fab, located in Kumamoto Prefecture, by teaming up with various Japanese companies to secure capacity.

Already TSMC has signed up Sony Semiconductors and Denso Corp. to have a stake in the new subsidiary called Japan Advanced Semiconductor Manufacturing Inc. (JASM). Sony has invested $500 million in JASM for a 20% equity stake while it was announced earlier this year that Denso would invest $350 million for a 10% stake in JASM.

In total, the fab will have an investment of $8.6 billion including subsidies from the Japanese government. The government will use its stake in the fab to bolster supply chain for semiconductors to improve the economic security.

The Kumamoto fab will be built in the town of Kikuyo and hire about 1,700 employees including some 320 people on loan from TSMC. The goal is to help ease the global semiconductor shortage that has been impacting the supply chain since late 2020 due to the outbreak of COVID-19.

Securing supply

For Sony, the investment in the fab means it will receive a stable supply of logic wafers. This is important given the ongoing chip shortage that is impacting the supply chain and causing many industries to push back production of devices and vehicles.

Denso has similar ideas in mind with the partnership helping to create a stable supply of semiconductors over the medium and long term for its vehicles. The automotive sector has been hit especially hard by the chip shortage with many automakers having to adjust production schedules and revenues as a result.

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