TSMC to build second wafer fab in Japan
In the latest stage of its global expansion, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) announced construction of a second wafer fab in Japan next to its first one in Kumamoto prefecture, taking its total investment in the country to over US$20 billion.
The owner of the fabs is Japan Advanced Semiconductor Manufacturing (JASM), of which TSMC holds 86.5 per cent. The other shareholders are Sony Semiconductor Solutions with six per cent, Denso Corporation with 5.5 per cent and Toyota Motor Corp with two per cent.
“Construction of the second fab is planned to begin by the end of 2024 and operations to begin by the end of the 2027 calendar year,” TSMC said in a statement.
“With both fabs, the JASM Kumamoto site is expected to offer a total production capacity of more than 100,000 12-inch wafers per month starting from 40, 22/28, 12/16 and 6/7 nanometer process technologies for automotive, industrial, consumer and HPC-related applications. It is expected to directly create more than 3,400 high-tech professional jobs,” it said.
The first fab is due to open on February 24, probably in the presence of Japanese Prime Minister Fumio Kishida (岸田 文雄) and TSMC founder Morris Chang (張忠謀). Also representing the company will be chairman Mark Liu (劉德音) and CEO C.C. Wei (魏哲家).
The Kumamoto plants are part of a historic global expansion of the company to meet rising demand for its precious chips. It is building a large plant in Phoenix, Arizona and has agreed to build another in Dresden, Germany. In all three countries, it is taking advantage of generous state subsidies from governments desperate to have the chips produced at home.
The German government will contribute up to five billion euros to the Dresden plant. TSMC will invest up to 3.499 billion euros into subsidiary European Semiconductor Manufacturing Company, of which it will own 70 per cent and which will run the new facility. TSMC’s is the single largest investment in the history of Saxony, of which Dresden is capital.
In Phoenix, TSMC is spending US$40 billion, one of the largest foreign investments in U.S. history. It is due to start production this year, using advanced 5 nm technology.
"When complete, TSMC Arizona will be the greenest semiconductor manufacturing facility in the United States producing the most advanced semiconductor process technology in the country, enabling next generation high-performance and low-power computing products for years to come," TSMC Chairman Mark Liu said. Apple and chipmakers AMD and Nvidia will be among the first customers of the Arizona plant.
On January 10, TSMC announced its annual revenue for 2023 at
NT$2,161.74 billion, down 4.5 percent compared to the same period in 2022. In 2023, annual capacity of its manufacturing exceeded 16 million 12-inch equivalent wafers, from nine fabs in Taiwan, two in the mainland and one in Washington state.
TSMC is the world’s biggest maker of advanced semi-conductors.
But this global expansion is not simple. Nowhere in the world can compete with the efficiency, work culture and supply network of the factories in Taiwan. Highly trained staff are available and willing 24/7.
In Phoenix, it has faced opposition from labour unions angry over the import of staff from Taiwan. In response, the company said that, during a “critical phase”, it required skilled expertise for specific TSMC Arizona construction activities and was temporarily bringing select specialised talent with strong experience and they would only be in Arizona for a limited time frame and not impact the workers onsite.
Another issue in Phoenix is a potential shortage of water. Arizona is in a desert region. Its main source is the Hoover Dam hundreds of miles away which delivers water to canals in central Arizona. Climate change has seriously reduced the supply of water.
Last year the state of Arizona restricted future home-building in the Phoenix area due to a lack of groundwater, based on projections showing that wells will run dry under existing conditions. The TSMC facility will require an enormous quantity of water – at full capacity, 40,000 acre-feet of water each year.
Farmers of cotton and alfalfa in Arizona said that shortages in recent years have persuaded some to sell their land to green energy companies which build solar panels on the site.
But the city government insists TSMC will have enough water. “We make sure that water resources will be available before we start any development project,” Mayor Kate Gallego told the Commonwealth magazine (天下雜誌) of Taiwan. “Before we approve any proposal, we make certain there will be enough water for it for a hundred years.”
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