Tokyo, Feb 5, 2026, 22:25 JST
- TSMC plans to mass-produce 3-nanometre chips in Kumamoto, Japan, marking a move to advanced manufacturing beyond Taiwan
- Local media estimate the investment at around $17 billion, prompting Japan to consider further support
- This shift comes as governments and chip consumers rush to secure supply for AI and other critical sectors
Taiwan Semiconductor Manufacturing Co’s CEO C.C. Wei announced Thursday that the company will start mass-producing advanced 3-nanometre chips in Kumamoto, southern Japan. Local reports estimate the investment at around $17 billion. Reuters
The shift is crucial today as AI hardware demand pushes the global supply chain toward a handful of companies capable of producing advanced chips at scale. TSMC, the largest contract chipmaker, plays a central role supplying AI processors, making its capacity plans a major focus for governments and large buyers alike.
This move comes amid Japan’s political and industrial efforts to revive advanced chipmaking and cut dependence on foreign suppliers for everything from cars to defense systems. Tokyo is backing both domestic and international projects with subsidies, and the stakes climb significantly as the focus shifts to cutting-edge production lines.
“We believe this fab will boost local economic growth and, crucially, lay the groundwork for Japan’s AI sector,” Wei told Prime Minister Sanae Takaichi in Tokyo. Takaichi described the plan as vital for “economic security” and expressed her determination to push it forward “by all means,” AP reports. Apnews
TSMC told Reuters via email that its second plant in Japan will use 3nm process technology to handle the surge in AI-driven demand. The Japanese paper Yomiuri pegged the investment at $17 billion, but TSMC wouldn’t confirm that number.
The term “3nm” refers to a cutting-edge manufacturing process that crams more transistors onto a chip, improving performance and reducing power consumption. These chips find their way into high-performance computing, AI servers, smartphones, and other gadgets.
TSMC’s top-tier chips are still produced in Taiwan, with previous plans for Japan focusing on older technology. Wei added the company is also discussing wider cooperation with Japanese clients and partners connected to the AI sector.
The Japan move is part of TSMC’s broader growth strategy, which also includes launching 3nm chip production at its second Arizona fab in 2027. The company has noted that its tech decisions and ramp-up timeline hinge on customer demand and market trends.
Japan is backing the domestic foundry startup Rapidus, which is working on advanced chips in Hokkaido’s north. According to Reuters, the government sees Rapidus and TSMC as catering to distinct markets, so direct competition between them isn’t anticipated.
TSMC has framed its Japan operation as a joint venture focused on Japan Advanced Semiconductor Manufacturing (JASM). Sony Semiconductor Solutions, Denso, and Toyota hold minority stakes in the project. A second fab is planned to start production by the end of 2027. Tsmc
The upgrade doesn’t come without risks. The AI surge has sparked massive spending across the sector, prompting executives to field concerns about a possible drop in demand—or the chance that an AI investment bubble could leave new facilities underused.
The Financial Times revealed that TSMC is gearing up to manufacture advanced chips in Japan, aligning with efforts by both the company and the Japanese government to boost the country’s role in front-end chip production. Ft
For Japan, the stakes go beyond just jobs. Governments see chips as critical infrastructure, and every step in advanced production—where capacity is limited and expenses run high—ties directly into national strategies for technology, security, and industrial strength.
