TSMC will accelerate production of 3‑nm chips in Japan, and the government will significantly increase subsidies

Brief annotation

Taiwanese company TSMC plans to bring 3‑nm chip production to Japan instead of the previously assumed 2‑nm. This decision is linked to support from the Japanese government and growing ambitions for localizing high‑technology manufacturing on the island.

1. What changes?
* Shift from 4‑nm to 3‑nm

Instead of a plan to launch 2‑nm chips, TSMC now considers starting 3‑nm technology in Japan. This could be the final stage if future plans remain unchanged.

* Scale of investment

In the new financial year (beginning of April), the Japanese government will double subsidies for semiconductors and AI, raising them to $7.8 billion.
TSMC intends to invest up to $17 billion in its second Japanese plant, bringing total investments with the first factory to $22.5 billion. Government subsidies will reach $7.9 billion.

2. Why does Japan attract TSMC?
1. Political support – Prime Minister Sanae Takahito actively promotes the semiconductor industry as key to technological independence.

2. Cooperation with major players – shareholders of the new plant, JASM, include TSMC, Sony and Denso, ensuring financial stability and access to Japanese technologies.

3. What will be at the new plant?
* Instead of the original plan for 7‑nm/6‑nm chips, the company will immediately start the 3‑nm process.

* The implementation timeline remains uncertain: originally scheduled for late 2027, but the exact date may change.

* 3‑nm technology lags behind 2‑nm, and by the time operations begin in Japan it may be even less advanced.
However, in the U.S., TSMC will already start producing 3‑nm chips next year, so regulatory hurdles are absent.

4. Conclusion
Taiwanese TSMC, backed by the Japanese government and major investors, moves from 2‑nm plans to a more realistic launch of 3‑nm chips in Japan. This decision reflects an increasing strategy to localize high‑technology semiconductor production on the island, as well as financial and political incentives from the Japanese government.