Taiwan Semiconductor Manufacturing Co. said Tuesday that it will increase its capital spending for a plant to be built in Japan's southwestern prefecture of Kumamoto by 20 percent to $8.6 billion to boost its production capacity.
The world's largest contract chipmaker also said major Japanese auto parts maker Denso Corp. will invest $350 million in Japan Advanced Semiconductor Manufacturing Inc., its subsidiary founded with Sony Semiconductor Solutions Corp., for the chip-making venture.
Denso's stake in the TSMC subsidiary will exceed 10 percent.
TSMC has previously said its initial capital expenditure for the plant would be around $7 billion with "strong support from the Japanese government."
TSMC also plans to increase monthly chip production capacity by 20 percent from originally planned while expanding the number of high-tech professional jobs created directly through the plant from about 1,500 to about 1,700.
The Taiwanese company also said the planned foundry, where production is targeted to begin by the end of 2024, will produce chips using 12-nanometer and 16-nanometer process technology, in addition to those utilizing 22-nanometer and 28-nanometer processes.
"TSMC is very glad to welcome Denso's participation in JASM," CEO C.C. Wei said in a statement. The TSMC subsidiary "enables us to leverage Japan's top-notch semiconductor talent and contribute to the growth of the global semiconductor ecosystem," he added.
For its part, Denso hopes owning a stake in the joint venture will lead to a more stable supply of chips for use in automobiles.
A Denso official said the parts maker has decided on the move because it expects to require more semiconductors down the road as more automobiles go electric.
