japan semiconductor, tsmc
Source: Shutterstock

TSMC, the leading Taiwanese semiconductor OEM is planning to build the first research and development center in Japan in a joint venture with Japan’s Trade Ministry, according to Nikkei Asia.

TSMC plans to invest 20 billion Japanese Yen in building a development center at Ibaraki, northeast of Tokyo, and establishing a new company locally.

A board meeting will soon be held, but a TSMC spokesman declined to comment on the matter. Official plans will be released earliest this week.

The new R&D center will implement advanced semiconductor packaging and testing. Installation of a new production line at the location is also taken under consideration.

A number of the world’s top semiconductor equipment and raw materials are sourced from Japan such as Tokyo Electron, Shin-Etsu Chemical, JSR, SCREEN Semiconductor Solutions, and SUMCO. These are all the main suppliers to TSMC.

According to Taiwan United Daily News, Japan’s Trade Ministry had been proactively talking TSMC into building a chip plant in Japan following the TSMC investment of US$12 billion to set up plants in Arizona.

A move that they worry will weaken the nation’s significance in the global semiconductor supply chain.

But a lack of sufficient supplying resources for wafer manufacturing in Japan could likely risk scattering the company’s development resources, leading TSMC to decline such proposals.

Sensing the need to acquire advanced semiconductor manufacturing domestically that had raised importance amid the pandemic, coupled with an escalation of the US-China tech cold war, Japan’s Trade Ministry had since turned to tempting TSMC to build a chip packaging firm in the country.