TSMC to build 2nd wafer fab in Japan

Taipei, Feb. 6 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, said on Tuesday that it has decided to build a second wafer fab in Kumamoto Prefecture, Japan.

Through its joint venture, Japan Advanced Semiconductor Manufacturing (JASM), TSMC said in a statement that the company and its Japanese partners aim to expand its production in Kumamoto, where the new plant is scheduled to break ground at the end of 2024, with operations slated to begin at the end of 2027.

JASM is currently owned by TSMC and its Japanese business partners, Sony Semiconductor Solutions Corp. (SSS) and Denso Corp., with the Taiwanese company holding the majority of shares.

TSMC said Japanese auto giant Toyota will take a minority stake in the joint venture.

The first fab of JASM, which was announced in November 2021, is scheduled to open on Feb. 24 with mass production expected to start in the fourth quarter of this year, making it the chipmaker's overseas production site with the fastest development progress.

Together with JASM's first fab, the overall investment of JASM will exceed US$20 billion, TSMC said, adding that it had strong support from the Japanese government.

After completion of the two fabs, TSMC said, JASM is expected to roll out more than 100,000 12-inch wafers a month under the maximum capacity, using the mature 40 nanometer, 28nm, 22nm, 16nm, 12nm processes as well as the advanced 7nm and 6nm technologies.

TSMC said JASM's chips will be used for production of automotive, industrial, consumer and high performance computing (HPC)-related applications.

The chipmaker said it is likely for JASM to adjust its production capacity to cater to its clients' needs, adding that the investment in Kumamoto is expected to create more than 3,400 high tech jobs in Japan.

According to TSMC, the chipmaker will hold an 86.5 percent stake in JASM with SSS, Denso and Toyota to own 6 percent, 5.5 percent and 2 percent, respectively.

TSMC Chairman Mark Liu (劉德音) and CEO C.C. Wei (魏哲家) will make an appearance at the opening ceremony for the first Kumamoto fab and founder Morris Chang (張忠謀) will also likely attend the event to witness the historic moment, a source close to the matter said on Monday.

Local media reports said Japanese Prime Minister Fumio Kishida might also attend the event and meet Chang.

In the Asia Pacific Economic Cooperation summit held in San Francisco in November, Chang and Kishida discussed forming a closer semiconductor partnership between Taiwan and Japan.

In addition to the Kumamoto fab investment, in March 2021, TSMC also set up the TSMC Japan 3DIC R&D Center, a subsidiary located in the Tsukuba Center of the National Institute of Advanced Industrial Science and Technology, to develop high-end integrated circuit packaging and testing services and provide one-stop services to clients.

Elsewhere in the world, TSMC's first fab in the U.S. state of Arizona is scheduled to begin mass production using the advanced 4nm process in 2025, a year behind schedule due to a lack of skilled workers.

A second Arizona fab is also under construction and is scheduled to begin mass production in 2026, using the 3nm process, the latest technology TSMC began commercial production in Taiwan at the end of 2022. However, the market has doubts about whether the plant will open as planned.

In Germany, TSMC has teamed up with Bosch GmbH, Infineon Technologies AG, and NXP Semiconductors N.V. to set up a joint venture, called European Semiconductor Manufacturing Co. (ESMC), which aims to build a wafer fab in Dresden.

The German plant is scheduled to start commercial production at the end of 2027, using the 12nm, 16nm, 22nm, and 28nm processes to produce chips for automotive electronics and specialty industrial devices.

Meanwhile, TSMC said that a board meeting on Tuesday approved a plan in which the chipmaker to distribute employees' business performance bonus and profit sharing totaling about NT$100.1 billion (US$3.20 billion) for 2023.

This includes business performance bonus of NT$50.09 billion distributed following each quarter of 2023 and profit sharing of NT$50.09 million to be distributed in July 2024, TSMC said.

The board meeting also approved a plan to issue a NT$3.50 per share cash dividend for the earnings of the fourth quarter of 2023, which hit NT$9.21. The ex-dividend date has been set for June 13.

The dividends will be distributed on July 11, according to the chipmaker.

Liu, who owns 12.91 million TSMC shares, is expected to receive NT$45.18 million in cash dividends in July under the plan, while Wei is expected to receive NT$22.37 million from the 6.39 million TSMC shares he owns.

The National Development Fund under Taiwan's Executive Yuan, the largest single shareholder of TSMC, is expected to bag about NT$5.79 billion in cash dividends as the fund currently owns 1.65 billion shares of the company, or a 6.38 percent stake.

(By Chang Chien-chung and Frances Huang)

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