Exciting news from the “Land of the Rising Sun”. TSMC (NASDAQ:TSM) on Tuesday said it will open a second manufacturing plant in Japan with backing from technology giant Sony and automaker Toyota (NYSE:TM).
Japan Advanced Semiconductor Manufacturing, Inc. (JASM), the manufacturing operation majority-owned by TSMC, will begin building the new factory this year and aims to bring it into operation by the end of 2027.
TSMC said the overall investment in JASM, factoring in a first facility that is set to begin operation this year, will exceed $20 billion U.S. The figure includes the contributions of other venture partners.
The expansion of TSMC’s operations in Japan highlights the Japanese government’s push to onshore manufacturing of semiconductors, which go into everything from cars and smartphones to military weapons and are seen as critical components in technology, such as artificial intelligence.
Japan is looking to regain some leadership in the semiconductor arena.
TSMC’s two factories in Japan will not manufacture the most cutting-edge chips, but they will focus on applications in areas like semiconductors for the automotive industry, industrial uses, consumer and so-called high-performance computing.
The world’s largest contract chip manufacturer, TSMC makes chips for companies like Apple and Nvidia and has been courted by many countries to set up operations locally. One of TSMC’s biggest overseas projects is a $40-billion U.S. investment in Arizona to build two chip manufacturing plants as part of a broader U.S. push to reshore manufacturing.
TSM shares grabbed 79 cents to $119.58, while shares in TM galloped $11.54, or 5.7%, to $214.57.