Taiwan Semiconductor Manufacturing (TSMC) said it will be spending an additional $1.6 billion in its chip plant in Japan in partnership with Sony Group.
Auto supplier Denso will take a 10 percent stake.
TSMC, which is the world’s largest contract chip maker, announced the $7 billion factory in southern Japan in November and construction is scheduled to start this year, with production beginning by the end of 2024.
TSMC said it decided to enhance the plant’s capabilities and increase monthly production capacity to 55,000 12-inch wafers, putting the new total cost at around $8.6 billion. It was originally due to have a monthly production capacity of 45,000 12-inch wafers.
TSMC is also a major Apple supplier and produces some of the world’s most advanced semiconductors. TSMC said that Denso would invest $350 million for a more than 10 percent equity stake in the Japanese plant.
“Through this partnership, we contribute to the stable supply of semiconductors over the medium to long term and thus to the automotive industry,” Denso CEO Koji Arima said. JASM’s Kumamoto fab is expected to directly create about 1,700 high-tech professional jobs.
Taiwan, home to chip makers such as TSMC, has become front and centre of efforts to resolve the chip shortage.
TSMC last year pledged to spend $100 billion over the next three years to expand chip capacity and is building a $12 billion chip fabrication plant in the U.S. state of Arizona.
