A worker walks outside the new semiconductor plant by Japan Advanced Semiconductor Manufacturing Company (JASM), a subsidiary of Taiwan's chip giant TSMC (Taiwan Semiconductor Manufacturing Company), in Kikuyo of the Kikuchi district, Kumamoto prefecture on February 14, 2024. PHILIP FONG/AFP via Getty Images
Taiwan Semiconductor Manufacturing Company Limited (TSMC), the world’s largest foundry of its kind, officially completed the construction of subsidiary plant Japan Advanced Semiconductor Manufacturing, Inc. (JASM) in Kumamoto Prefecture, marking a new stage in revitalizing Japan’s semiconductor industry and Japan–Taiwan cooperation in the context of the U.S.-led free world’s high-tech strategic deterrence against communist China.
TSMC’s sharing of cutting-edge semiconductor technology with neighboring Japan would help improve the geopolitical status of Taiwan and Japan while facing potential threats from the Chinese Communist Party (CCP).
Taiwan’s newly elected president and current vice president, Lai Ching-Te, hailed the plant’s construction and commissioning as significant for deepening the Taiwan–Japan industrial alliance and taking on the next era in computer technology together.
At an earlier meeting with members of the Japanese Senate, Mr. Lai expressed gratitude to the Japanese government for its strong support for the construction of JASM. He anticipated more cooperation between the two sides on regional peace and stability.
Japanese Prime Minister Fumio Kishida delivered congratulations via video to the opening ceremony of JASM, which was held on Feb.24, saying the Japanese government has implemented “unprecedented, bold support for the development of a domestic manufacturing base for advanced semiconductor.”
TSMC founder Morris Chang, chairman Mark Liu, CEO C.C. Wei, and Japanese Minister of Economy, Trade and Industry Ken Saito, as well as TSMC’s partners Sony and Denso Corporation, presented the ceremony.
He recalled that TSMC was invited by Japan in 2019 to build a factory in Japan and officially announced it in November 2021. Construction began in April 2022. Usually, it would take three years to complete construction of such a plant, but it was completed in less than two years and will start mass production this year.
Founder of Taiwan's chip giant Taiwan Semiconductor Manufacturing Company (TSMC) Morris Chang speaks during the opening ceremony for the new semiconductor plant by Japan Advanced Semiconductor Manufacturing Company (JASM), in Kikuyo of the Kikuchi district, Kumamoto prefecture on February 24, 2024. STR/JIJI PRESS/AFP via Getty Images
JASM occupies an area of about 2,292,000 square feet and is expected to have a monthly production capacity of 55,000 wafers.
Kenichiro Yoshida, president of Sony Corp., a partner investment company of JASM, recalled that in January 2021, he met with TSMC’s CEO C.C. Wei in Taipei and wanted to talk about purchasing logic wafers. But unexpectedly, Mr. Wei told him that TSMC was considering building a factory in Japan and hoped Sony could help. As a result, the conference’s theme changed from procurement negotiations to new project development.
Japanese Minister of Industry Ken Saito praised TSMC as “the most important partner for Japan in realizing digital transformation, and its Kumamoto factory is an important contributor for us to stably procure cutting-edge logic chips that are extremely essential for the future of industries in Japan.”
TSMC’s semiconductor plant in Kikuyo Town, Kumamoto Prefecture, represents a total investment of $8.6 billion, and the Japanese government has positioned the semiconductor as an essential material for the country’s economic security, subsidizing the project with around $3.17 billion.
Meanwhile, TSMC has decided to build a second plant; the Japanese government will subsidize about US$4.87 billion, and the two phases of construction support funds totaling 1 trillion 200 billion yen, or about $8 billion.
JASM Expected to be an Opening toJapan
It is widely recognized in Japanese society that the birth of JASM was a once-in-a-century opportunity for Kumamoto, a city on Kyushu island.
The entry of JASM has brought tremendous business opportunities to the local economy, and the construction of housing and other related facilities is also in full swing.
Starting in 2022, Kumamoto University has offered specialized semiconductor courses and will establish a new School of Information Integration this year to cultivate practical human resources for the semiconductor industry.
Kazuto Suzuki, a professor at the University of Tokyo, told Japanese media that TSMC’s choice to build a plant in Japan is creating a “Semiconductor Industry 2.0.”
Teruo Asamoto, a professor at Kyushu University, believes that TSMC’s decision to build a Japanese plant has multiple considerations, including the invitation from the Japanese government; Kyushu is the “Silicon Island” of Japan, with thousands of semiconductor-related companies; Kumamoto has abundant water resources for making ultrapure water used in industrial consumption; and Japan ranks second and first in the world in semiconductor manufacturing and materials, respectively.
Japan’s Semiconductor Industry Strategy
On June 6, 2023, Japan’s Ministry of Economy, Trade and Industry released a revised version of its Semiconductor and Digital Industry Strategy, which lays out the future policy direction for Japan’s semiconductor-related industries.
The strategy elevates the position of the semiconductor and digital industries to a new level, indicating that given enormous changes in the global landscape, coping with economic security risks, digitalization, and greening are of increasing significance.
On Sept. 19, 2023, the Japan Society of Applied Physics held a symposium on “The Re-emergence of Japan’s Advanced Logic Semiconductors” at the site of TSMC’s Kumamoto plant. The seminar brought together the best minds from the semiconductor industry, industry, academia, and research, as well as the heads of the relevant governmental agencies in Japan.
At the meeting, Toshiro Hiramoto, president of the association and professor at the University of Tokyo, said that in addition to TSMC’s plant in Japan, Japan is also working with the United States to develop next-generation semiconductors and build a plant in Hokkaido.
Hisashi Kanazashi, an official of the Ministry of Economy, Trade and Industry, cited Japan’s lag in digitization as a factor in the decline of its industrial competitiveness, saying it has “cost Japan 30 years.” He emphasized that cutting-edge chip technology is key to determining international competitiveness.
According to Mr. Kanazashi, Japan’s plan to revive its semiconductor industry consists of three steps: speeding up semiconductor production, establishing the foundation for collaborative research and advancement of next-generation semiconductors, and laying the groundwork for a joint future technologies boom with the rest of the world.
In addition to subsidies to TSMC, the Japanese government has provided financial assistance to several semiconductor companies, such as Rapidus, which aims to nationalize cutting-edge semiconductors with a total budget of 4 trillion yen (about $26.5 billion).
Political observers noted that the Japanese government strategically doubled down on its alliance with Taiwan and the United States in the semiconductor sector out of concern over containing potential threats from the Chinese Communist Party (CCP) in the tech industry.
Restriction of High-End Tech Exports to China
In October 2022, the U.S. Department of Commerce announced a ban on exports to China of advanced semiconductors for supercomputers and artificial intelligence (AI) and the equipment and technology needed to make them.
Moreover, Japan and the Netherlands, which have strong points in semiconductor manufacturing equipment, were called upon to synchronize with the United States. Semiconductor manufacturing equipment in this field is almost exclusively limited to these three countries.
Acting U.S. Attorney General Matthew Whitaker (C) announces new criminal charges against Chinese telecommunications giant Huawei with Federal Bureau of Investigation Director Christopher Wray (R) and Commerce Secretary Wilbur Ross at the Department of Justice January 28, 2019 in Washington, DC. Chip Somodevilla/Getty Images
The Trump administration was wary of the CCP’s 2015 release of its “Made in China 2025” initiative, cutting the CCP off in high-tech areas led by 5G communications. From 2018 to 2020, the United States blacklisted and imposed an embargo on Chinese companies such as Jinhua Integrated Circuits Co Ltd, Huawei, and Semiconductor Manufacturing International Corp.
The Biden administration later extended the restrictions in order to hinder the flow of cutting-edge semiconductor manufacturing tech to China, which risks being transferred to military technology, and to prevent the CCP’s growth in the field at all costs.
Japan and the Netherlands are implementing export restrictions on semiconductor manufacturing equipment to China as requested by the United States.
The economic scale of Japan’s chip manufacturing equipment is about $30 billion, of which $10 billion in orders come from China, the largest buyer.
However, the Japanese government opted to abandon these interests and join in its allies’ goal of curbing the expansion of the CCP, with the Japanese government’s new regulations restricting the export of semiconductor equipment coming into effect on July 23 last year.
In addition, as early as March last year, Japan announced the implementation of export controls on 23 high-performance semiconductor manufacturing equipment types.
Jon Sun is a contributor to The Epoch Times with a focus on China-related topics.
