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TSMC Accelerates Chip Plant Setup in Japan; Outpaces U.S. Facility Progress

Taiwan
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Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest chipmaker, is making swift progress in setting up its new chip plant in Kumamoto, Japan. Hundreds of support staff, along with additional personnel from TSMC suppliers, have been deployed to the site. The installation of chip production tools is slated to commence in October and is expected to be completed by Q1 2024, ahead of schedule. The $8 billion facility is on track to commence production by the end of next year. In contrast, TSMC’s advanced plant in Arizona, U.S., which will produce ultra-advanced 4-nm chips, has faced some delays.

Key reasons for the divergence in progress include the superior infrastructure and timely government support in Japan, where the government has allocated substantial subsidies of 476 billion yen ($3.5 billion) for the TSMC project. In contrast, the U.S. only recently finalized the CHIPS Act to support the industry and has yet to allocate funds. TSMC’s Kumamoto project benefits from a well-established chip supply chain and a more seamless collaboration with local partners, while its Arizona facility faces logistical and regulatory complexities.

Cultural factors, such as a more accepting attitude toward long work hours and monthly schedules in Japan and Taiwan, contribute to the smoother progress in Kumamoto. Additionally, TSMC’s choice of local partners and suppliers with experience in chipmaking plays a pivotal role. While TSMC acknowledges a learning curve in overseas expansion, the company is dedicated to improving operations. Nonetheless, it’s noted that TSMC’s Taiwan base remains unparalleled in terms of speed and efficiency.

Finding qualified workers remains a challenge in all locations, particularly in Japan, where an aging workforce and a 10-year gap in producing cutting-edge chips have led to a shortage of experienced production engineers. Despite the varying challenges, TSMC’s expansion efforts in the U.S., Japan, and Germany aim to address increasing customer demand for diversified production capabilities.

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