Key Takeaways
1. TSMC’s second plant in Kumamoto will start volume production in the first half of 2029, 18 months later than planned.
2. The groundbreaking for the second plant has been delayed to “sometime in 2025” due to site congestion and traffic issues.
3. Resource reallocation to U.S. facilities for tariff management contributes to uncertainty in the new start date.
4. Limited demand for advanced 6 nm and 7 nm technologies in Japan is causing further delays in the project’s urgency.
5. The overall investment for TSMC’s plants is around ¥2.96 trillion, with potential subsidies from the Japanese government of up to ¥1.2 trillion.
TSMC’s efforts to grow its presence in Japan are facing setbacks. The company’s second plant in Kumamoto is now projected to start volume production in the first half of 2029, which is about eighteen months later than previously planned, as reported by Nikkan Kogyo Shimbun through MoneyDJ.
Construction Timeline Changes
The construction schedule has also been altered. Initially, the groundbreaking was set for the first quarter of 2025, but it has since been adjusted to “sometime in 2025.” C.C. Wei, the chair and CEO of TSMC, explained that the delays are due to congestion and traffic complications at the site. Additionally, The Wall Street Journal noted that TSMC is reallocating resources to its facilities in the U.S. to better manage tariff regulations, making the new start date uncertain.
Market Conditions Impacting Progress
Market conditions seem to be another challenge. According to Economic Daily News, the 6 nm and 7 nm processes intended for the second Kumamoto plant aim at clients like Sony and Denso. However, there is currently a limited demand in Japan for such advanced technologies, which diminishes the urgency for rapid development and leads to further delays.
Despite the troubles with Kumamoto 2, the first Kumamoto plant is progressing well. Wei informed investors that this initial plant, which specializes in 12 nm to 28 nm chips, began mass production in the latter half of 2024 and is already seeing favorable output.
Future Expectations
Looking forward, both plants are anticipated to produce over 100,000 12-inch wafer equivalents monthly once they are fully operational. The overall investment is projected to be around ¥2.96 trillion (approximately $20.04 billion), with the Japanese government providing up to ¥1.2 trillion (about $8.12 billion) in subsidies. The timely arrival of that capacity now hinges on how quickly infrastructure issues can be resolved and how the demand for advanced automotive and imaging chips in Japan develops throughout the decade.
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