After the opening ceremony of TSMC's first fab in Kumamoto Prefecture, Japan's Minister of Economy, Trade and Industry, Ken Saito, told the media at the event that he would subsidize TSMC's second fab in Kumamoto by JPY732 billion (approximately US$4.9 billion), provided that it continues to produce and strengthens local procurement.
Nikkei reported that after directly subsidizing TSMC's first fab in Kumamoto by up to JPY476 billion, the Japanese government has announced that it will subsidize the second fab by a further JPY732 billion, for a total of about JPY1.208 trillion (about US$8 billion). That translates into a government direct subsidy percentage of 40% as TSMC has invested more than US$20 billion in constructing its first and second wafer fabs in Kumamoto.
Ken Saito revealed that the Ministry of Economy, Trade and Industry (METI) of Japan has set the prerequisites, including that the second fab must continue to be in production for more than 10 years after mass production and that half of the silicon wafers required for production must be procured from Japanese manufacturers. In addition, silicon wafers outside the components and materials, more than 50% of the procurement of enterprises set up in Japan, and so on.
As sustainable production has been mentioned in the media regarding JASM, TSMC also released ESG facts in a press release, saying that green manufacturing is the cornerstone of the company's sustainable operations, and it regularly seeks to find areas of improvement spanning energy management, water management, waste management, and air pollution control.
ESG facts of JASM and TSMC:
1. JASM will use 100% renewable energy when it starts to operate. It is also the target for all TSMC overseas sites.
2. When JASM's first fab was announced, the fab planned to use 13,000 tons of water per day. JASM's first fab has managed to decrease that number to around 8,500 tons of water per day, marking a 30% cut from the initial plan. Most of the water source at JASM will be groundwater. To preserve groundwater, JASM has committed to a groundwater replenishment amount of over 100% of the used groundwater.
3. In May 2023, JASM signed a comprehensive agreement with K-town, Kumamoto Prefecture, the Water Recycling Farming Promotion Council, and the Kumamoto Groundwater Foundation to accelerate the promotion of groundwater recharge. JASM is deeply aware of the importance of groundwater in Kumamoto and believes in fulfilling its responsibility work together with the people of Kumamoto to protect the groundwater.
4. Other than equipment, JASM's first fab targets over 60% local procurement rate in 2030.
5. TSMC is the world's first semiconductor company to join the RE100 renewable energy initiative.
6. TSMC has set a goal of reaching net zero emissions by 2050. To achieve this, TSMC will continue to set related mitigation measures, strengthen its wide variety of green innovations, and actively adopt renewable energy. In the short term, the company has set the goal of zero emissions growth by 2025 and reducing emissions to year-2020 levels by 2030.
7. Each year, TSMC publishes an annual Sustainability Report, which evaluates critical challenges, benchmarks against global practices, outlines goals, and proposes improvement plans.
8. TSMC is the world's only semiconductor company selected as a component of the Dow Jones Sustainability Indices (DJSI) for 23 consecutive years.
