Taiwan Semiconductor Manufacturing Co. plans to build an advanced chip-making factory in Japan in 2022 and start operations there in 2024, CEO C.C. Wei said Thursday.
The plant is expected to be jointly run with Sony Group Corp. and produce semiconductors used in automobiles among other products. Auto parts maker Denso Corp. is also considering joining the project, according to sources familiar with the matter.
Japanese Prime Minister Fumio Kishida said TSMC will invest around 1 trillion yen ($8.8 billion) in the factory and that his government will provide financial aid.
Wei told an online investors' conference that after conducting due diligence, the company decided to build a specialty technology fabrication plant, subject to the approval of its board of directors.
"We have received a strong commitment to support this project from both our customers and the Japanese government," Wei said.
The world's largest contract chipmaker is considering building the new plant adjacent to Sony's plant for image sensors used in smartphones in Kikuyo in the southwestern Japan prefecture of Kumamoto, a person familiar with the matter said.
While Wei did not disclose the planned location of the plant, he said it will produce 22-nanometer and 28-nanometer chips. Chips that size are used in automobiles and consumer electronics, according to the Japanese Ministry of Economy, Trade and Industry.
Speaking as the company reported its earnings in the July to September period, the chief executive said that by expanding production bases on a global scale, the company can acquire many talents and meet the needs of its clients.
Kishida welcomed the news, saying the chip factory will serve to improve Japan's economic security. Financial aid for such projects will be included in an upcoming stimulus package, he said at a press conference in Tokyo after dissolving the House of Representatives for a general election.
The Japanese government has wanted a semiconductor manufacturing base in the country amid the global computer chip crunch and growing tensions between the United States and China over technology development.
According to the sources, the Japanese government is considering paying about half of the cost of building the factory.
"Facilitating the domestic production of semiconductors is extremely important," Japanese industry minister Koichi Hagiuda told reporters.
TSMC announced in February that it will establish a subsidiary for research and development in Tsukuba, Ibaraki Prefecture, near Tokyo.