Taiwan Semiconductor Manufacturing Corp, a major chip supplier to companies such as Nvidia and Apple, said on Thursday it plans to make 3-nanometer semiconductors – advanced chips 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 Takachi ahead of a general election on Sunday, where she hopes to secure the public mandate for her policies by riding on high approval ratings.
The announcement came while Takaichi was meeting with TSMC CEO and Chairman CC Wei in Tokyo.
During the meeting Takaichi said, “This is very meaningful from the point of view of Japanese economic security, and I would like the project to proceed in every way as proposed.”
The advanced chips to be made in Kumamoto will be used in AI, robotics and autonomous driving, areas that Takashi’s cabinet has designated as strategically important areas.
TSMC’s first Kumamoto plant began mass production in late 2024 and makes less advanced chips. The company is also building new plants in Arizona, US to create a fabrication plant cluster and meet growing customer demand due to the global AI craze.
TSMC said in a separate email statement that Wei believes Japan’s “forward-looking semiconductor policy will bring significant benefits to the semiconductor industry.”
As Japan seeks to gain a competitive edge in global advanced chip manufacturing, it is also providing heavy subsidies for Domestic chip maker RapidusWhich is moving towards mass production of state-of-the-art chips.
“It is very important from the point of view of economic security to have the world’s most advanced semiconductor factory in Japan,” the Prime Minister’s Office said in a message posted on Twitter on Thursday.
Despite growing concerns over a potential AI-related bubble, where large-scale investments may not yield profits, TSMC’s Wei said last month that he is confident growing AI demand from its customers is “real.”
Last month, TSMC said it planned to increase capital spending by about 40% this year as AI-related demand boosted its profits. it is planned to Increase your capital expenditure $52 billion-$56 billion for 2026, up from $40 billion last year.
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Chan reported from Hong Kong.
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