TSMC, the world’s leading semiconductor manufacturer, is reportedly contemplating the establishment of a third fabrication plant in Japan. This plant, insiders suggest, would be dedicated to the production of 3nm chips. The proposed factory, tentatively called TSMC Fab-23 Phase 3, is planned for the Kumamoto Prefecture as per information shared with supply chain partners, reports the Japan Times. TSMC is the process of constructing its first Japanese fab for less advanced chips and has previously announced plans for a second one.

According to Evertiq, the Japanese Economy Ministry is offering various subsidies to reposition Japan as a key player in global electronics. The country reportedly allocated USD 13 billion from this fiscal year’s supplementary budget to stimulate investment in its chip industry.

Japan has witnessed several investments aimed at rejuvenating its semiconductor industry. Rapidus Corporation, a Japanese semiconductor firm, recently commenced construction on its IIM-1 plant in Chitose City, Hokkaido. On the heels of this news, ASMl announced plans for a base in Hokkaido to support Rapidus’ future semiconductor fab.

As TrendForce reported earlier, Japan holds significant advantages in semiconductor upstream equipment and raw materials. Major industry players are setting up operations in Kyushu, Tohoku, and Hokkaido.

Kyushu is gaining recognition as a semiconductor hub, partly due to JASM (TSMC’s Kumamoto Plant). Sony and SUMCO, a major producer of raw wafers, have been operating in this region for several years. Many small to medium-sized semiconductor-related businesses have also set up shop there, earning Kyushu the nickname “Silicon Island.”

The Tohoku region, encompassing areas around Sendai and Fukushima, is the heart of Japan’s semiconductor raw materials manufacturing. It is home to the Renesas Yonezawa plant and major raw wafer producers SUMCO and Shin-Etsu. Tohoku University is also noteworthy for its strong reputation in semiconductor materials research and its large talent pool.

Powerchip Semiconductor Manufacturing Corp (PSMC), a Taiwanese wafer foundry service provider, has selected Sendai, Miyagi Prefecture, as the location for its proposed USD 5.4 billion facility after considering five different sites in Japan. The company plans to prioritize the 40nm process node and automotive electronics production, further enhancing Tohoku’s importance in the semiconductor industry.

As for TSMC’s potential 3nm fab in Kumamoto, sources estimate it could cost around USD 20 billion, including the production equipment. TSMC told the Japan Times via email that they are “currently focused on evaluating the possibility of building a second fab” in Japan and had no further updates at this time.