TSMC Mulling To Construct Second Factory In Japan For Making 5, 10 Nanometre Chips

TSMC, which is one of the key iPhone makers for Apple, is planning to construct a second chip plant in Japan, in a bid to manufacture 5 nanometre and 10 nanometre chipsets.

This move is being seen to help with the revival of Japan's advanced semiconductor manufacturing.

Taiwan Semiconductor Manufacturing Co (TSMC), which is one of the key iPhone makers for Apple, is planning to construct a second chip plant in Japan, in a bid to manufacture 5 nanometre and 10 nanometre chipsets from the second half of the decade, the media has reported. The second plant by TSMC is likely to be built at a cost of 1 trillion yen (or $7.4 billion) to build, says a report by news agency Reuters, which quoted Nikkan Kogyo newspaper.

This move is being seen to help with the revival of Japan's advanced semiconductor manufacturing, which it sees as a key requirement for future economic growth driven by new digital technologies, the report added.

It should be noted that Japan’s government will offer a 476 billion yen subsidy, or about half the expected cost of TSMC's chipset factory. Other investors in the plant include, Sony Group Corp and auto parts maker Denso Corp.

Meanwhile, chipset making giant Qualcomm is likely to source the manufacturing of Snapdragon 8 Gen 3 chips to TSMC and Samsung. TSMC may get the majority of chipset orders built on the 3 nanometre process because of the incredibly high 80 per cent yield rate, says a previous report by GSMArena.

To recall, in December 2022, TSMC said it would more than triple its planned investment at its new chip manufacturing plant in the US state of Arizona to $40 billion, among the largest foreign investments in US history. Apple had also said it is planning to use chipsets from a factory in the US state of Arizona starting in 2024, in an attempt to reduce its dependency on Asian production, which has been disrupted due to workers' unrest in China.

The tech giant is also planning to source chips from Europe in the future.

The world's biggest contract manufacturer of chipsets is planning in the coming months to announce its cutting-edge semiconductor plant north of Phoenix, beside another chip factory that the company committed to in 2020, The Wall Street Journal reported, citing people familiar with the expansion plans.