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Japan kicks in another $4.8 billion for TSMC plant, calls chips ‘extremely essential for the future of industries’ 

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The Japanese government will provide an additional ¥732 billion ($4.86 billion) in subsidies for Taiwan Semiconductor Manufacturing Co. to expand its plant in the country, Economy Minister Ken Saito said on Saturday.

“TSMC is the most important partner for Japan in realizing digital transformation, and its Kumamoto factory is an important contributor for us to stably procure cutting-edge logic chips that is extremely essential for the future of industries in Japan,” he said at the opening ceremony for TSMC’s Kumamoto factory.

The chipmaker, Taiwan’s largest company, plans to start shipping logic chips for CMOS camera sensors and automobiles from the facility in Kumamoto on the island of Kyushu by the end of this year through its venture with iconic local companies including Sony Group Corp. and Toyota Motor Corp. The government has already allocated ¥476 billion for the factory.

The new aid will go toward construction of a new fabrication building next to the existing one, the company’s first in Japan. Known as TSMC Fab-23 Phase 2, the project announced by TSMC earlier this month will produce chips as narrow as 6 nanometer and plans mass production by 2027.

Japan has paid trillions of yen for companies such as TSMC, Samsung Electronics Co. and Micron Technology Inc. to move some operations to the country to secure supply of chips used in everything from automobile production to mobile phones.

“Governments around the world are fiercely competing by throwing in a large amount of money so that they can secure domestic supply of chips, and Japan investing this amount of money is necessary for us to foster further development of industries and economic security,” the minister said. “We learned from mistakes in the past, and I’m sure we have dazzled the rest of the world by the speed with which we have implemented.”

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