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TSMC considering opportunities to establish an intricate chip manufacturing facility in Japan
Taiwan's TSMC is contemplating expansion beyond Taiwan, with the intention to establish a sophisticated silicon packaging system in Japan. The semiconductor giant is aiming to introduce a chip-on-wafer-on substrate (CoWoS) packaging technology in the nation.
It is said that Taiwan Semiconductor Manufacturing Co, also known as TSMC, has plans to establish a high-tech silicon packaging facility in Japan, according to those knowledgeable about the situation. This move hints at a possible boost for Japan's efforts to revitalise its semiconductor industry.
Talks are still in the early phases, according to insiders who chose to stay unnamed because the details aren't public yet. The giant in the semiconductor industry is considering bringing its chip-on-wafer-on substrate (CoWoS) packing tech to Japan, as shared by a person with knowledge on the issue.
CoWoS is an advanced technology that involves piling up chips on each other, which improves processing power, saves space, and lowers energy usage. Currently, all of TSMC's CoWoS capacity is based in Taiwan. The source stated that no firm decisions about the size or timeframe of possible investments have been made yet. TSMC, previously referred to as Taiwan Semiconductor Manufacturing Co., chose not to comment on this issue.
The rising need for sophisticated semiconductor packaging worldwide has soared alongside the growth of artificial intelligence, leading chip manufacturers such as TSMC, Samsung Electronics, and Intel to increase their production capabilities.
In January, C.C. Wei, the CEO of TSMC, shared plans to increase CoWoS production twofold this year, with additional growth expected in 2025. TSMC also revealed plans to enhance its advanced packaging capacity in Chiayi, located in the southern part of Taiwan, in response to strong market demand, although no specific details were provided.
The building of a new CoWoS facility in Chiayi is set to begin in early May, according to remarks credited to Vice Premier Cheng Wen-tsan by Taiwan's Central News Agency.
TSMC is striving to increase its presence in Japan by enhancing its advanced packaging capabilities. It has recently opened one facility and declared plans for another on Kyushu, an important region for chip production. The company has established collaborations with businesses including Sony and Toyota. The total expected investment in this Japanese venture is over $20 billion.
In 2021, TSMC set up a cutting-edge packaging research and development hub in Ibaraki prefecture, which is located northeast of Tokyo. The strong ecosystem of semiconductor materials and tools in Japan, along with growing investments in chip manufacturing capacity and a reliable customer base, puts the nation in a good position to take on a greater responsibility in advanced packaging, as pointed out by a high-ranking representative from Japan's industry ministry.
TrendForce analyst Joanne Chiao has warned that TSMC's possible advanced packaging project in Japan may be limited in size due to the unclear demand for CoWoS packaging in the country. Chiao further noted that the majority of TSMC's existing CoWoS clients are located in the United States.
TSMC's efforts in Japan have been significantly supported by hefty subsidies from the Japanese government. This is because Japan considers semiconductor manufacturing crucial for its economic stability, especially after facing challenges with South Korea and Taiwan.
At the same time, it is rumored that Intel is considering setting up a sophisticated packaging research center in Japan in order to strengthen partnerships with local chip supply businesses, as per insiders. Samsung, on the other hand, is establishing a similar research center in Yokohama, situated southwest of Tokyo, supported by the government. Besides, the South Korean chip manufacturer is also in talks with Japanese and other companies about material sourcing, aiming to utilize packaging technology to keep pace in the high-bandwidth memory chip market, according to Reuters.
(Incorporating information from various sources)
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