Taiwan's TSMC to build advanced 3-nanometre AI chips in Japan

Taiwan Semiconductor Manufacturing Co. (TSMC) will make its advanced 3-nanometre chips at its second Japanese plant, with TSMC's CEO meeting with Japan's prime minister Sakae Takaichi on Feb. 5 to confirm the plan.

Diversification

In recent years, it has made moves to diversify its manufacturing capability and has begun to develop facilities outside of Taiwan, such as in the United States and, in this case, Japan.

TSMC already operates one chip manufacturing plant in Kumamoto, Japan, producing less advanced chips, mainly for automotive and imaging (cameras) use.

According to Tom’s Hardware, the first plant began operations in late 2024, with TSMC chief executive C.C. Wei reporting “good yields” from the plant.

TSMC had broke ground on a second facility, also in Kumamoto, and planned to produce more advanced chips, reported by Nikkei to be 6-nm to 7-nm chips.

But it has paused construction after sluggish demand for those chips has prompted a rethink.

A report by Tom’s Hardware in December 2025 reveals that construction at the site had paused, with construction machinery being removed, and orders for new equipment were paused until 2027.

It appears that TSMC has changed plans, with Wei flying to Japan to speak with Prime Minister Takaichi to tell her that the company will be producing its advanced 3nm chips.

These chips are just behind the cutting-edge 2nm chips that TSMC can manufacture now, but are still in high demand by AI companies.

The change will likely delay the construction at the plant, which is partly subsidised by the Japanese government, thus explaining Wei’s meeting with Takaichi.

Nearshoring

TSMC's manufacturing, particularly of its most advanced chips is mainly focused in Taiwan.

But due to geopolitical tensions and fears of a potential invasion of Taiwan by Mainland China, key customers have tried to incentivise TSMC into "nearshoring" some its advanced chip production, with plants in the U.S. due to also produce 3nm chips.

The plants in Japan and the U.S. would represent the most advanced chips TSMC produces outside of Taiwan, but neither are likely to produce chips until 2027.

Top image via TSMC/Facebook