TSMC Brings Cutting-Edge AI Chips to Japan

Taiwan Semiconductor Manufacturing Corp. (TSMC) announced plans to produce advanced 3-nanometer semiconductors at its second factory in Kumamoto, Japan. This development is a significant boost for Japan's chipmaking ambitions, especially in strategically important fields such as artificial intelligence, robotics, and autonomous driving.

The cutting-edge chips will be utilized in next-generation AI products and smartphones, meeting a booming global demand. TSMC's first Kumamoto plant, which started mass production in late 2024, manufactures less advanced chips. The company is also expanding its operations in Arizona, USA, to further meet the escalating demand driven by the AI frenzy.

This strategic decision by TSMC underscores Japan's forward-looking semiconductor policy and its commitment to economic security. Prime Minister Sanae Takaichi has emphasized the immense significance of hosting such advanced semiconductor manufacturing capabilities within Japan, viewing it as crucial for national security. The initiative aligns with Japan's broader efforts to strengthen its position in global advanced chipmaking competitiveness, including substantial subsidies for domestic chipmaker Rapidus.

Despite some concerns about a potential AI-related investment bubble, TSMC's leadership remains confident in the sustained growth of AI demand. The company recently announced an increase in its capital spending, projecting between $52 billion and $56 billion for 2026, up from $40 billion the previous year, reflecting the robust market outlook.