TOKYO, Feb 23 Reuters Chipmaker TSMC formally opens its first Japanese plant on Saturday, highlighting the Taiwanese firm39;s critical role in Tokyo39;s multibillion dollar efforts to reboot its oncemighty semiconductor manufacturing industry.

That Japan turned to TSMC for help on an industry it once dominated reflects the Taiwan chipmaker39;s dominant position in the foundry business and Tokyo39;s heightened concern over China39;s growing prowess in a wide swathe of technology.

The arrival of TSMC, the world39;s leading contract chipmaker, in Japan is seen as having sparked investment across a sector vital to economic security even as the government eyes a greater prize with its backing for homegrown foundry venture Rapidus.

The possibility of having TSMC build a fab in Japan really rallied support from disparate parts of the semiconductor industry, said Damian Thong, head of Japan research at Macquarie Capital Securities.

They have built a snowball effect around it, he said.

By 2027, Taiwan is projected to control twothirds of foundry capacity for advanced processes as its lead is eroded by aggressive expansion in the U.S., according to research firm TrendForce, with Japan increasing its global share to 3.

TSMC, which is also building capacity in the U.S. and Germany, is targeting mass production at the fab later this year and has announced plans for a second plant, bringing total investment in the venture to more than 20 billion.

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