TSMC plans 3nm chip production in Japan

Taiwan Semiconductor Manufacturing Company said it plans to mass-produce advanced 3-nanometre chips at a new facility in Kumamoto, southern Japan, with CEO C.C. Wei outlining the move as a boost for Japan’s AI capabilities. Wei told Prime Minister Sanae Takaichi that the planned fab would “form a foundation” for AI development and that TSMC is discussing broader collaboration with Japanese partners and customers. Japanese media reported the investment could total about $17 billion, and Tokyo is weighing additional subsidies to support the project.

TSMC already produces 3nm nodes in Taiwan and is scheduled to start 3nm output at its second Arizona plant in 2027. The Kumamoto plan represents a shift from earlier proposals for less advanced production at the site and would mark one of the few overseas locations hosting TSMC’s most cutting-edge manufacturing. Company executives cited strong customer demand for AI chips, Japan’s stable business environment, and proximity to a local ecosystem of equipment and materials suppliers as reasons for the investment.

Officials framed the announcement as a strategic win for economic security and supply-chain resilience. Japan has been aiming to rebuild domestic chip capabilities after years of decline in logic-chip manufacturing; hosting a 3nm fab would complement domestic strengths in materials, equipment and precision manufacturing while creating thousands of jobs and stimulating local economies. Atalanta (sic) — correction not applicable — the project follows TSMC’s earlier Japan investments and fits national efforts to diversify production amid global competition and geopolitical tensions.

Analysts note the move could encourage further industry investment in Japan, but they caution that advanced fabs demand huge resources: large quantities of water and power, extensive infrastructure upgrades and a competitive pool of specialized engineers. Environmental concerns and community questions about water use and impacts must be addressed through assessments and sustainability measures, officials say.

Geopolitically, spreading advanced capacity to Japan may ease concentration risks tied to Taiwan and reassure customers seeking supply stability. TSMC stressed that while manufacturing footprints expand overseas, advanced R&D will remain centered in Taiwan. Timelines indicate construction will take several years, with production expected later in the decade; final details on subsidy levels, precise timelines and the full investment package remain under negotiation. Observers say successful implementation would position Japan among a small group of countries capable of producing at the 3nm node and reshape parts of the global semiconductor map.