Taiwanese chipmaker TSMC said on Tuesday (Feb 6) it will build a second Japanese plant to begin operation by the end of 2027, bringing total investment in its Japan venture to more than US$20 billion with the support of the Tokyo government.

Taiwan Semiconductor Manufacturing Co (TSMC) announced plans in 2021 to build a US$7 billion chip plant in Kumamoto in southern Japan’s Kyushu.

TSMC said last month the first Japanese factory would open in February with volume production in the fourth quarter, and that the company was also exploring building a second factory in the country.

In a statement, TSMC, the world’s largest contract chipmaker, said its majority-owned unit Japan Advanced Semiconductor Manufacturing in Kumamoto would build a second fabrication plant, or fab, in response to rising customer demand.

The second fab will begin construction by the end of this year and with both factories the site is expected to have total monthly capacity of more than 100,000 12-inch wafers to be used for automotive, industrial, consumer and high performance computing-related applications, TSMC said.

The capacity plan may be further adjusted based upon customer demand, it added.

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TSMC holds an 86.5 per cent stake in the Japanese venture, with Sony Group 6 per cent, auto parts maker Denso 5.5 per cent and carmaker Toyota 2 per cent. REUTERS