Taiwan Semiconductor Considers Expanding Advanced Chip Packaging Capacity in Japan

Taiwan Semiconductor Manufacturing is reportedly considering expanding its advanced packaging capacity to Japan, in a move that could potentially boost the country's semiconductor industry. The company is exploring the possibility of introducing its chip on wafer on substrate (CoWoS) packaging technology to Japan, according to sources cited by Reuters. At present, all of TSM's CoWoS production is based in Taiwan.

Discussions around this proposed expansion are still in the preliminary stages, with no definitive decisions made on the size or timeline of any potential investment, the report indicated. If the plan materializes, it would align with Japan's efforts to strengthen its domestic semiconductor capabilities. The ongoing technological competition between the U.S. and China has prompted shifts in global chip industry alliances and priorities. The U.

S. introduced new export restrictions last year to restrict China's access to advanced semiconductor technology. Recent reports suggest that several Taiwanese chip companies are considering establishing a presence in Japan, not only to support TSM's plans for a second chip facility in the country but also as a response to encouraging signals from Japan.

TSM's proposed collaboration with Sony (SONY), Denso, Toyota (TM), and the Japanese government for the construction of a new chip fab in Japan underscores the growing interest in the region. The demand for advanced semiconductor packaging has been on the rise globally, fueled by the AI race and other technological advancements. To keep up with this demand, major chipmakers like TSM, Samsung Electronics (OTC:SSNLF), and Intel (INTC) are scaling up their production capacities.

TSM's CEO C.C. Wei announced earlier this year the company's plans to double its CoWoS output by 2024, with further expansions expected in 2025.

Additionally, TSM disclosed intentions to increase advanced packaging capacity in Chiayi, southern Taiwan, in response to strong market demand. The construction of a new CoWoS facility in Chiayi is scheduled to begin in early May, as confirmed by Vice Premier Cheng Wen-tsan via Taiwan's official Central News Agency. TSM's commitment to enhancing its presence in Japan was further demonstrated by the establishment of an advanced packaging research and development center in Ibaraki prefecture in 2021.

In conclusion, TSM's potential expansion into Japan signifies a strategic move to strengthen its global footprint and leverage new opportunities in the semiconductor market. With the industry experiencing rapid growth and innovation, companies like TSM are striving to stay ahead of the curve and meet the increasing demand for cutting-edge semiconductor technologies. Japan's semiconductor industry stands to benefit from these developments, as collaboration and investments from leading players like TSM could help bolster the country's position in the competitive global semiconductor landscape.