Taiwan’s chipmaker TSMC said on Thursday that it will manufacture some of the world’s most advanced semiconductors in Japan to meet rapidly growing demand linked to artificial intelligence, giving a boost to the country’s chipmaking ambitions.
Taiwan Semiconductor Manufacturing Corp., a key supplier to companies such as Nvidia and Apple, announced that it plans to produce 3-nanometer semiconductors at its second factory in Kumamoto Prefecture, which is currently under construction. These advanced chips are used in areas including AI products and smartphones.
Political significance ahead of Japan election
The decision by TSMC, the world’s largest contract chipmaker, was seen as a major boost for Prime Minister Sanae Takaichi ahead of a general election scheduled for Sunday, as she seeks public support for her policies amid high approval ratings.
The announcement came during a meeting between Takaichi and TSMC CEO and Chairman C.C. Wei in Tokyo.
“It is very meaningful from the perspective of Japanese economic security, and I would like the project to move forward as proposed, by all means,” Takaichi said during the meeting.
Chips to support AI, robotics and autonomous driving
The advanced chips to be manufactured in Kumamoto will be used in AI, robotics, and autonomous driving, sectors that Takaichi’s cabinet has identified as strategically important.
TSMC’s first plant in Kumamoto began mass production in late 2024 and currently manufactures less advanced chips.
Global expansion amid AI boom
TSMC is also constructing new plants in Arizona, United States, as part of efforts to build a fabrication plant cluster and meet rising global demand driven by the AI boom.
In a separate emailed statement, TSMC said Wei believes that Japan’s “forward-looking semiconductor policy will deliver significant benefits to the semiconductor industry.”
Japan pushes for advanced chip competitiveness
As Japan seeks to strengthen its position in advanced chipmaking, the government is providing large subsidies to domestic chipmaker Rapidus, which is moving toward mass production of cutting-edge semiconductors.
“There is huge significance in having the world’s most advanced semiconductor factory in Japan from the perspective of economic security,” the Prime Minister’s Office said in a post on X on Thursday.
TSMC confident on AI demand, boosts spending
Despite concerns over a potential AI-related investment bubble, Wei said last month that demand from AI-focused customers is “real.”
TSMC also announced last month that it plans to increase capital spending by nearly 40 per cent this year, driven by AI-led profit growth. The company expects capital spending in 2026 to rise to USD 52 billion–USD 56 billion, up from USD 40 billion last year.
