Taiwanese company opens 1st Japan chip factory, more investment planned

Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, held an opening ceremony for its first factory in Japan on Saturday, with more investment planned to build a second plant, Report informs via Kyodo.

The factory, built in the town of Kikuyo in the southwestern prefecture of Kumamoto, is set to start mass production of mature-technology semiconductors, including 12-nanometer chips used in automobiles and industrial equipment, in the October-December quarter this year.

The $8.6 billion factory is run by its subsidiary Japan Advanced Semiconductor Manufacturing, in which Sony Group Corp. and Denso Corp., a major Japanese auto parts maker, each have a minority stake. The Japanese government is offering up to 476 billion ($3.2 billion) in subsidies.

Attracting the chipmaker's new plant is part of the Japanese government's efforts to rejuvenate the country's once-powerful chip sector and strengthen its supply chains as demand for semiconductors continues to grow in every corner of a digitalizing world.

The country's chip companies held over 50 percent of global market share in the 1980s, but began to lose their competitiveness after fierce friction with the United States over trade.

The Taiwanese company, which is also building plants in Arizona in the United States and Dresden in Germany, is diversifying its production sites in the wake of risks arising from tensions between Taiwan and China, which sees the democratic island as its territory.

The semiconductor giant announced earlier this month it will build a second factory in Kumamoto, raising its total investment in its Japanese operation to over $20 billion.