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Japan Boosts Tech Competitiveness with $4.85 Billion Subsidy for TSMC’s Second Plant

Aimed at enhancing domestic chip production, the substantial investment underscores Japan's strategic partnership with the world’s leading chipmaker, TSMC
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Japan said it plans to offer around 730 billion yen ($4.85 billion) in subsidies to Taiwan Semiconductor Manufacturing Co. (TSMC) as part of a deal for the creation of its second chip fabrication facility in Kumamoto on the southernmost of the four main islands of Kyushu. This reveals the latest of Japan’s aggressive moves to grow its position in the worldwide chip-making industry through supporting the domestic production of leading-edge chips.

The timing of the announcement takes place on the same day as TSMC’s Kumamoto first-plant opening ceremonies. For several days, speculation has circulated in the press about government support for the second facility. While confirming the subsidies for the plant in Kumamoto, which was announced earlier in the year by TSMC’s chief executive officer, it also confirmed that the decision has yet to be officially announced by the Ministry of Economy, Trade and Industry.

Construction of the second plant is expected to begin within the year, and it is slated to commence mass production before the end of 2027 of 6-nanometer chips, giving Japan a large technological lead on the anticipated capabilities of the first plant. The first factory is expected to come online at some point in 2023 to churn out 20-nanometer chips.The more than $20 billion that TSMC is investing to operate both of the Japanese plants in conjunction with Toyota Motor and other companies is a strategic collaboration expected to bring automotive-use chips and other cutting-edge semiconductor products critical to autonomous driving and artificial intelligence applications. When combined, the two Kumamoto lines will produce more than 100,000 wafers each month to keep Japan in the top ranks of the world semiconductor race.Supporting the combined costs, their automation, and a wide range of technological advancements TSMC-TM joint venture is pioneering is expected to make official total government support for both TSMC deals of at least 1.2 trillion yen evident Japan is ready to back TSMC’s incredible capabilities and support for Japanese innovation that far surpasses any other company.

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