TSMC Eyes 3nm Chip Production in Japan with $17 Billion Kumamoto Investment

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, is reportedly planning to mass produce advanced 3-nanometre (3nm) semiconductors in Kumamoto, southern Japan, marking a major shift in its global manufacturing strategy. According to Japanese newspaper Yomiuri, the total investment for the new plan could reach approximately $17 billion, underscoring Japan’s growing role in the global semiconductor supply chain.

The Japanese government, which has already provided substantial subsidies to support TSMC’s expansion in Kyushu, is now considering additional financial backing for this advanced chip investment. Previously, TSMC had announced plans to invest $12.2 billion in its second Kyushu fabrication plant to manufacture 6- to 12-nanometre chips. However, the company is expected to discuss revisions to that plan with Japanese authorities, potentially upgrading the facility to handle more advanced 3nm chip production.

TSMC executives are scheduled to visit Japan’s prime minister’s office, highlighting the strategic importance of the project at the highest political level. While TSMC has not officially commented on the report, the company confirmed during its January earnings call that construction of its second Japanese fab has already begun. TSMC also emphasized that final technology choices and production ramp-up schedules will depend on customer demand and broader market conditions.

Currently, TSMC manufactures 3nm chips exclusively in Taiwan, though it has announced plans to start producing them at its Arizona facility in the United States by 2027. Expanding 3nm production to Japan would further diversify TSMC’s manufacturing footprint and reduce geopolitical and supply chain risks.

Japan is simultaneously investing heavily in its domestic semiconductor ambitions through Rapidus, a state-backed foundry project based in Hokkaido. The government has reportedly concluded that Rapidus and TSMC will serve different market segments and will not directly compete.

As global demand for advanced semiconductors continues to surge—driven by electronics, automotive, artificial intelligence, and defense applications—governments worldwide are prioritizing secure access to cutting-edge chips. TSMC’s potential 3nm expansion in Japan reflects this broader push to strengthen resilient and diversified semiconductor supply chains.