Last Saturday, TSMC officially opened its Kumamoto factory in Japan. TSMC founder Zhang Zhongmou, current chairman Liu Deyin, and CEO Wei Zhejia attended the opening ceremony of this overseas factory, and various sectors in Japan also sent their blessings.
The factory is affiliated with TSMC's subsidiary, Japan Sunrise Semiconductor Manufacturing Co., Ltd. (JASM). The project began planning in 2021 and construction began the following year. It is expected to begin production by the end of this year. A few investors, Sony, Denso, and Toyota, will purchase the 12 inch chips produced by the factory in the future.
At the ceremony, the Japanese government also announced another piece of good news. Japanese Prime Minister Fumio Kishida announced that he will provide funding for TSMC's second factory in Kumamoto. Japanese Economy Minister Ken Saito further stated that the government will allocate an additional 732 billion yen (approximately 4.86 billion US dollars) in special subsidies to expand TSMC's production capacity in Japan.
Previously, Japan had allocated 476 billion yen for Kumamoto's first TSMC factory. The new factory will be planned next to the existing factory and is expected to produce 6 nanometer chips, achieving mass production in 2027.
Saito Kenji stated that the world is in fierce competition and investing a large amount of funds to ensure domestic chip supply, and Japan's decision to make this is necessary to ensure industrial development and economic security. Japan's current speed of action is believed to impress other countries.
Subsidies for a unique talent
Japan is vigorously promoting the revival of its semiconductor industry, with a key strategy being to provide generous industry subsidies. Although Japan's chip subsidy policy was introduced later than the framework of governments such as the United States, the approval progress is far ahead, thus attracting the attention of global semiconductor companies.
For investment projects planned for Japan by TSMC, Micron, and Samsung Electronics, the Japanese government quickly issued up to 50% construction cost subsidies, which are highly competitive globally in terms of speed and scale.
In contrast, the heavily publicized chip bill in the United States only announced last week that it would provide $1.5 billion in subsidies to Gexin, accounting for approximately 12.5% of the company's planned investment. This is still the first large-scale subsidy issued by the United States, with the previous two subsidies amounting to only $35 million and $162 million respectively.
Arisa Liu, a senior chip analyst and researcher at the Taiwan Institute of Economic Research, said that the Japanese government's rapid actions have made it the preferred destination for Asian chip manufacturers to expand overseas production. Moreover, the chip industry in the Asian region enjoys strong synergies with minimal competition, indicating that more cooperation will emerge in the future.
Brady Wang, an analyst at Counterpoint Research, pointed out that by establishing a business in Japan, TSMC can not only enter the country's advanced materials and semiconductor equipment industry, but also strengthen partnerships with major technology companies in Japan and around the world.
But he added that although Japan provides a relatively low-risk production environment, overcoming the challenge of cultural differences remains a noteworthy issue.