Source: AFP
Taiwanese chip giant TSMC is set to open an $8.6 billion factory in Japan on Saturday as the company moves some of its critical hardware manufacturing away from its home base.
Taiwan Semiconductor Manufacturing Company, which counts Apple and Nvidia as clients, makes half the world’s chips, used in everything from smartphones to satellites and increasingly in artificial intelligence technology.
But TSMC’s customers, as well as governments worried about supplies of chips vital to the economy and defense, want the company to produce more chips away from the self-ruled island.
China’s growing assertiveness toward Taiwan — which it claims as its own territory and has not ruled out taking by force — has fueled concerns about the world’s reliance on the island for chip production and prompted TSMC to differentiate where it produces them.
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The new factory in Japan is “TSMC’s most significant international investment to open in many years,” said Chris Miller, author of “Chip War: The Fight for the World’s Most Critical Technology.”
“It will also strengthen the political relationship between Taiwan and Japan at a time when Taiwan is trying to make sure it has strong friends who can help it resist Chinese pressure,” Miller told AFP.
But TSMC’s new facility on the southern island of Kyushu is also a coup for Japan, as it races with the United States and Europe to lure semiconductor companies with huge subsidies.
State sweeteners
Prime Minister Fumio Kishida is said to be among those attending the opening ceremony on Saturday afternoon with senior TSMC officials.
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Companies such as Toshiba and NEC helped Japan dominate microchips in the 1980s, but competition from South Korea and Taiwan saw its global market share drop from more than 50 percent to about 10 percent.
Now Japan has up to four trillion yen ($26.7 billion) in state sweeteners to help triple domestic chip sales to more than 15 trillion yen by 2030.
TSMC’s new factory in Kikuyo town, for which the government has pledged more than 40 percent of the cost — Sony and Denso are also involved — is just the first.
With “strong” support from the Japanese government, TSMC this month announced a second facility, to make more advanced chips, and is reportedly considering a third and even a fourth.
Others receiving government funds include Kioxia, Micron and Rapidus, an ambitious consortium that includes IBM and Japanese companies for state-of-the-art 2-nanometer logic chips.
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Welcome banner
TSMC is building a second plant in the US state of Arizona and is planning another in Germany, its first in Europe.
But Japan has the advantage of being geographically closer, has a wealth of experience in the field and, for the Kikuyo factory, which took at least 22 months to build, is fast.
By contrast in the United States, which itself has announced $52.7 billion in subsidies to bolster its own sector, the Arizona plant has been delayed and has seen disputes with unions.
“I have seen many factories being built by different companies, but TSMC was built with remarkable speed,” Taro Imamura, a local official in Kikuyo, told AFP.
“Everyone in the city, from children to the elderly, now knows the words ‘chip’ and ‘TSMC,'” Imamura said at Kikuyo’s town hall, where a banner reads “Welcome TSMC workers.”
Kyushu’s Kumamoto region is already a hub for Japanese semiconductor companies, including machine builders for chipmakers such as Tokyo Electron that do strong business with China.
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But as with other sectors in aging Japan, there are concerns about finding enough workers, particularly with local students either leaving or opting for industries other than chips.
Graduates are “more interested in software,” Kenichiro Takakura, an associate professor at the National Institute of Technology’s Kumamoto College, told AFP.
Source: AFP