The Japanese government has announced that it will provide a whopping $4.86 billion in subsidies to Taiwan Semiconductor Manufacturing Co. (TSMC) to expand its plant in the country. This move comes as part of Japan’s efforts to secure a stable supply of cutting-edge logic chips, which are crucial for the future of industries in the country.
Economy Minister Ken Saito expressed the importance of TSMC as a partner in Japan’s digital transformation journey during the opening ceremony for TSMC’s Kumamoto factory. He stated, “TSMC is the most important partner for Japan in realizing digital transformation, and its Kumamoto factory is an important contributor for us to stably procure cutting-edge logic chips that is extremely essential for the future of industries in Japan.”
TSMC, being Taiwan’s largest company, has plans to start shipping logic chips for CMOS camera sensors and automobiles from its Kumamoto facility by the end of this year. The company has formed a venture with renowned local companies such as Sony Group Corp. and Toyota Motor Corp. to achieve this goal. The Japanese government has already allocated ¥476 billion for the factory, and the additional subsidies will be used for the construction of a new fabrication building adjacent to the existing one.
This new building, known as TSMC Fab-23 Phase 2, will be the company’s first in Japan and will focus on producing chips as narrow as 6 nanometers. The project aims to achieve mass production by 2027, further solidifying TSMC’s position as a leading chipmaker in the industry.
Japan has been actively investing trillions of yen to attract companies like TSMC, Samsung Electronics Co., and Micron Technology Inc. to establish operations in the country. This strategy is aimed at securing a stable supply of chips that are used in various sectors, ranging from automobile production to mobile phones.
Minister Saito emphasized the importance of government investment in securing domestic chip supply, stating, “Governments around the world are fiercely competing by throwing in a large amount of money so that they can secure domestic supply of chips, and Japan investing this amount of money is necessary for us to foster further development of industries and economic security.” He also highlighted Japan’s efficient implementation of these investments, which has garnered attention from the rest of the world.
The expansion of TSMC’s plant in Japan not only signifies the country’s commitment to digital transformation but also highlights the global competition for chip supply. With governments worldwide investing heavily in this sector, it is clear that the race to secure a stable chip supply is becoming increasingly fierce. Japan’s substantial subsidies to TSMC demonstrate its determination to foster economic growth and ensure the future development of its industries.