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TSMC planning to expand its foothold in Japan

Taiwan Semiconductor Manufacturing Company (TSMC) is reportedly planning to expanc its advanced semiconductor manufacturing facilities in Japan. TSMC is constructing a new chip plant in Japan, which will produce older, more mature chips. Nonetheless, industry insiders say that variations in working culture in America and reduced prices in Japan have prompted management to contemplate expanding the Japanese chip facility.

The Japanese plant of TSMC is recently garnering more attention, with TSMC presently planning to invest $8.5 billion in the facility in order to begin manufacturing the items next year.

According to a new Reuters article, TSMC finds it reasonably easy and inexpensive to develop a chip production plant in Japan. The company stated in 2021 that it will form a new subsidiary in Japan to build a facility in the Kumamoto prefecture of Kyushu island.

Japan, like the United States, has a thriving industry capable of meeting TSMC’s chip demand. Estimating chip demand is an important aspect of establishing new chip manufacturing facilities because the investment costs are part of a business model established to justify the investment.

TSMC
credit: wccftech

TSMC reports that the cost of a new plant in Japan is far less than in the United States.

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The cheaper expenses are another important reason driving the corporation to Japan. According to industry insiders, the company’s cost forecasts for the American chip facility have proven inadequate. The fab had projected that the plant would cost 20% more to build; however, the costs have grown and are now estimated to be 50% higher than those incurred in Japan.

Differences in working cultures are stifling the American chip site’s progress. TSMC is concerned about similar issues for a German chip factory. Last month, the taiwanese chip maker pledged 3.5 billion Euros to the site as part of an ambitious $11 billion investment through collaborations with local companies and government subsidies in Germany. Long holidays and stringent labour union legislation, on the other hand, have raised concerns among TSMC executives about the prospect of low output from the European plant.

The taiwanese chip makerUS facility has been fraught with controversy as the company clashes with labour groups. The installation of high-end chip manufacturing machinery, which TSMC argues can only be installed by qualified experts from Taiwan to speed up the process, is the main source of contention between the two parties. Local unions, on the other hand, have accused the company of unsafe work and safety practises, which TSMC has contested by pointing out that its safety record in Arizona has been exceptional.

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Nivedita Bangari
Nivedita Bangari
I am a software engineer by profession and technology is my love, learning and playing with new technologies is my passion.
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