Sources say TSMC is considering building a third plant in Japan to aim at 3nm chip manufacturing.

CTOnews.com, Nov. 21, TSMC's plant in Kumamoto, Japan has made significant progress. It now employs more than 1,000 people and plans to start mass production next year.

TSMC has informed supply chain partners that it is considering building a third chip plant in Kumamoto prefecture to produce advanced 3nm chips, TSMC Fab-23 III, Bloomberg reported, citing people familiar with the matter.

People familiar with the matter said it was not clear when the third plant would be built, but by the time the new plant went into mass production, 3nm might have lagged behind the latest technology by a generation or two.

▲ source: TSMC sources said that this information has been widely shared with its partners and related parties, including Japanese companies. The possibility of a fourth factory is being discussed, but a lack of land is likely to be located outside Kumamoto prefecture, such as Kitakyushu, three people involved said.

In response, a TSMC spokesman said: "We will decide the capacity expansion strategy according to customer demand, operational efficiency, government subsidies, economic conditions and so on. TSMC is committed to meeting customer needs and supporting the semiconductor industry in the long term." "We are investing in response to structural changes in manufacturing. We are considering the possibility of building a second factory in Japan, but we have no further information to disclose at this time."

▲ source: TSMC CTOnews.com previously reported that TSMC's Japanese plant mainly produces 12 nm and 22 nm process products. If all goes according to plan, the first plant is expected to achieve mass production by the end of 2024. In addition, TSMC plans to build a second plant in Kumamoto prefecture to produce 5nm chips.

TSMC Kumamoto factory has received strong support from the Japanese government, Sony Semiconductor Solutions, Denso and other partners. The total capital expenditure of the plant is $8.6 billion (currently about 61.662 billion yuan), and Japan's Ministry of economy, Trade and Industry approved a subsidy of 476 billion yen (currently about 22.991 billion yuan) in June, accounting for about 40 per cent of Japan's total subsidies.

For TSMC's second plant in Japan, the Japanese government is considering providing it with a subsidy of up to 900 billion yen (CTOnews.com Note: currently about 43.47 billion yuan).