FAR EAST: JAPAN REPORT
TSMC, the world’s largest semiconductor foundry, has announced that it will build a new plant in Japan, with plans to begin construction in 2022 and mass production in 2024. The Sony Group and Denso Corporation are expected to participate in the construction of the new plant.
The new plant will produce logic semiconductors with a circuit line width of 22 to 28 nanometers. They are generally used in signal processing that requires large amounts of data, and in high-performance microcomputers used in car control. TSMC envisions the site adjacent to the Sony Group’s image sensor plant in Kumamoto Prefecture as the planned construction site.
Source: The Nikkei
PSR Analysis: The Japanese government has been working to attract the project since 2019 and plans to allocate subsidies for this announced plan. According to current reports, the Japanese government is planning to subsidize about 500 billion yen out of the total investment of about 1 trillion yen for the new plant, although the subsidy is being considered from various angles as it may be questioned whether it is consistent with WTO rules.
The TSMC plants that Japan relies on for procurement are concentrated in Taiwan, and against the backdrop of China’s increasing pressure on Taiwan, there are concerns about future procurement risks. For Japan, this announcement is welcomed as it will enhance the indispensability and independence of its semiconductor industry.
Of course, the story is not so simple, and the fact that the new plant will be located in Japan does not mean that the current shortage will be solved at once. Semiconductors are used not only in automobiles, but also in electrical appliances and PCs. It remains to be seen whether the struggling automakers will be able to conclude supply contracts with TSMC. But of course, this is good news that should be viewed positively by automakers with plants in Japan, and with the shortage of semiconductors not only affecting recent production, but also predicting that the problem will be prolonged, we are looking forward to an early start. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
