Japan to subsidize US$5 billion for TSMC's Fab2 in Kumamoto

Chiang, Jen-Chieh, Taipei; Judy Lin, DIGITIMES Asia 0

Credit: AFP

The day before Taiwan Semiconductor Manufacturing Company's (TSMC) inauguration of its first fab in Kumamoto, Japan, on February 24, Japanese media outlets reported that the Japanese government plans to provide up to JPY730 billion (around US$5 billion) of direct subsidy to its planned second fab at the same site.

According to Yomiuri, Nikkan Kogyo, and Kyodo news reports, the JPY730 billion subsidy is an additional subsidy specifically for the second fab, exceeding the JPY476 billion provided to the first fab in Kumamoto.

The reports said the government of Japan hopes to solidify the foundation of producing semiconductors in Japan through subsidizing fabs to secure its economic safety. The decision will be announced shortly.

The second fab, to be operated by TSMC's joint venture, Japan Advanced Semiconductor Manufacturing (JASM), will start construction in late 2024 and will produce advanced chips of 6/7 nm. It is advancing the manufacturing processing technology of logic IC in Japan significantly. Currently, Japan can only produce up to 40nm and will have to import more advanced chips or have them produced by overseas contractor foundry services.

TSMC is investing more than US$20 billion in the two fabs in Kumamoto, which will hire more than 3,400 people. The subsidies provided by the Japanese government to TSMC are reaching JPY1.2 trillion in total.

The media speculates that as a condition of the subsidies, the Japanese government will request TSMC to continue producing chips in Japan and prioritize supplies to Japan's domestic demand when there is a shortage of chips.