Japan commits $4.9 billion to support TSMC's expansion

Japan helps TMSC expand: Japan has pledged an additional 732 billion yen (approximately $4.86 billion) in subsidies to Taiwan Semiconductor Manufacturing Company (TSMC) to facilitate the construction of a second chip fabrication plant. 

The commitment comes as TSMC inaugurated its first Japanese factory, marking a major feat in Japan's efforts to revitalise advanced semiconductor manufacturing and fortify its industrial supply chains amidst escalating tensions with China.

Minister of Economy, Trade and Industry Ken Saito said the strategic importance of TSMC's chip production in Japan, highlighting that the chips produced in the new facility will be even more advanced and cater to applications such as AI and autonomous driving. 

The move is aimed at ensuring Japan's access to a stable semiconductor supply.

The additional financial support, combined with subsidies for TSMC's first factory, could exceed 1 trillion yen in taxpayer-funded investments.

TSMC, the world's largest chipmaker, plans to commence mass production in Japan by the end of the year, with total investments in the venture, including a second plant, surpassing $20 billion.

Once operational, the combined monthly capacity of the two factories will exceed 100,000 12-inch wafers, supplying leading technology firms and automakers like Sony and Toyota Motor.

In parallel, Japan is investing in Rapidus, a domestic chip venture, which aims to collaborate with IBM and Imec to mass produce cutting-edge chips on Hokkaido Island starting in 2027.

The collaboration between TSMC and Japan underscores the country's commitment to bolstering its semiconductor industry and securing its technological future amidst global geopolitical uncertainties.

(With Reuters Inputs)