TSMC to produce cutting-edge 3nm AI chips in Japan as demand from tech giants soars

TSMC to make advanced AI semiconductors in Japan in boost for its chipmaking ambitions

TOKYO (AP) -- Taiwan's chipmaker TSMC said Thursday it will be manufacturing some of the world's most cutting-edge semiconductors in Japan to meet booming artificial intelligence-related demand, in a boost for the country's chipmaking ambitions. Taiwan Semiconductor Manufacturing Corp., a major chip supplier to companies such as Nvidia and Apple, said Thursday it plans to make 3-nanometer semiconductors -- advanced chips that are used in areas such as AI products and smartphones -- at its second factory in Japan's Kumamoto Prefecture, which is under construction. The decision by TSMC, the world's largest contract chip maker, was a coup for Prime Minister Sanae Takaichi ahead of a general election on Sunday, where she hopes to secure the public's mandate for her policies riding on high approval ratings. The announcement came while Takaichi was meeting with TSMC's CEO and Chairman, C.C. Wei, in Tokyo. "It is very meaningful from the perspective of Japanese economic security, and I would like the project to move forward as proposed, by all means," Takaichi said during the meeting. The advanced chips set to be made in Kumamoto will be used in AI, robotics and autonomous driving, sectors that Takaishi's cabinet has designated as strategically important fields. TSMC's first Kumamoto plant started mass production in late 2024 and makes less advanced chips. The company also is building new plants in Arizona in the U.S. to create a fabrication plant cluster and meet growing demand from customers building on the global AI frenzy. TSMC said in a separate emailed statement that Wei believes Japan's "forward-looking semiconductor policy will deliver significant benefits to the semiconductor industry." As Japan looks to gain ground in global advanced chipmaking competitiveness, it is also providing huge subsidies for its domestic chipmaker Rapidus, which is advancing towards mass producing cutting-edge chips. "There is a huge significance to have the world's most advanced semiconductor factory in Japan from the perspective of economic security," the Prime Minister's Office said in a message posted on X on Thursday. Despite growing concerns over a potential AI-related bubble where massive investments may not pay off, TSMC's Wei said last month he was confident the growing AI demand from its customers is "real." Last month, TSMC said it plans to increase capital spending by up to nearly 40% this year as AI-related demand lifted its profits. It plans to raise its capital spending for 2026 to $52 billion-$56 billion, up from last year's $40 billion.

TSMC's Japan Plans Are Now Looking Much More Aggressive, as the Chip Giant Will Produce 3nm Chips in the Region to Support Gigantic AI Demand

TSMC is now looking to expand its fab operations in Kumamoto, Japan, as the chip giant now plans to introduce 3nm production lines, a massive upgrade from the previous plans. The Taiwan chip giant has realized that expanding production in Taiwan alone won't do the job, given the gigantic node demand from the AI sector. More specifically, it is the advanced processes that are in significant demand by HPC customers, which is why production lines responsible for nodes like 3nm are severely bottlenecked. However, TSMC plans to address this by investing in Japan, as the company's CEO, C.C.Wei. met with Japan's Prime Minister Sanae Takaichi, after which it was disclosed that the Kumamoto Fab 2 will now produce 3nm chips. There were reports a few weeks back that TSMC was increasing its presence in the Japanese semiconductor market, claiming that the company sees rising competition from Rapidus, a Japanese competitor looking to enter the 2nm segment. And given the demand crunch TSMC currently faces, it is viable for the company to look beyond mature processes and focus instead on what its AI customers want. According to reports, the Japanese PM was "flattered" by TSMC's announcement, calling it "vital" to the nation's economy. TSMC's expansion into Japan is a clear indication that the company has begun to factor in geopolitical uncertainties in its operations in Taiwan. Last month, the Taiwan chip giant signed a major deal with the Trump administration, willing to invest up to $250 billion in Arizona by developing advanced packaging plants, chip fabs, and R&D centers. TSMC also had ambitions to scale up production at its Germany project, but progress has stalled. The reports don't indicate when the Kumamoto fab will start producing 3nm chips, but a viable estimate is within the 2027-2028 timeline, similar to when the Arizona facility will begin the same process. Another interesting point is that both Japan and the U.S. will be on equal footing in chip technology production, despite TSMC committing a massive investment in the latter region.

TSMC to Make More Advanced Chips in Japan as Part of AI Push -- Update

Taiwan Semiconductor Manufacturing plans to start making more advanced chips in Japan, a move that would be a major boost to the country's efforts to secure cutting-edge technology needed for artificial intelligence. Japan's prime minister, Sanae Takaichi, said the advanced chips made at TSMC's Kumamoto site will be used in data centers, AI, robotics and autonomous driving, fields her cabinet has designated as strategic sectors. "TSMC's expansion in Kumamoto will fill a missing piece for our nation by enabling the domestic production of advanced logic semiconductors," she said Thursday during a meeting with TSMC's chairman, C.C. Wei. Wei announced the manufacturing upgrade during the meeting. Once production at Kumamoto starts, it will mark the first time TSMC has made 3-nanometer chips in Japan. Originally, TSMC's factory in the southern Japanese prefecture was supposed to focus on logic chips for cars and telecoms equipment using 6 to 12-nanometer technology. Construction of the fab began last fall but factors including geopolitical complications and sluggish demand for less advanced chips led TSMC to delay and re-evaluate production plans in favor of the high-performance chips required for AI applications, The Wall Street Journal has reported. The adoption of 3-nanometer technology represents a major leap for Japan, which doesn't have capacity to mass produce advanced chips essential for AI. Japan's government has been pushing to change that, pledging billions in support for key sectors. Projects with government backing include Rapidus's chip-production project in Hokkaido, U.S. memory maker Micron Technology's facilities in Hiroshima and TSMC's Kumamoto factory. TSMC has previously outlined plans to invest $20 billion in Japan. No details on changes to the investment plan were provided Thursday. Wei said that the upcoming fab will help form the foundation of Japan's AI business, and contribute to local economic growth. Write to Yang Jie at [email protected] and Sherry Qin at [email protected]