Stock Markets February 4, 2026

TSMC to Build 3nm Mass Production Facility in Kumamoto with $17 Billion Investment, Yomiuri Reports

Plans mark a major upgrade to earlier Kyushu capacity proposal as Tokyo weighs further financial support

By Nina Shah
TSMC to Build 3nm Mass Production Facility in Kumamoto with $17 Billion Investment, Yomiuri Reports

According to a Yomiuri report, Taiwan Semiconductor Manufacturing Co. (TSMC) intends to mass produce advanced 3-nanometre chips at a new facility in Kumamoto, southern Japan, backed by an investment of $17 billion. Japan's government, which has already provided subsidies to expand TSMC capacity in Kyushu, is evaluating additional support for the project. The company previously planned a $12.2 billion investment focused on 6-12 nanometre capacity at a second Kyushu fab and will discuss modifying that plan with Tokyo. Separately, Japan is subsidising domestic foundry venture Rapidus in Hokkaido; authorities say the two firms will produce chips for different purposes and not compete.

Key Points

  • TSMC reportedly intends to mass produce 3-nanometre chips in Kumamoto with a $17 billion investment, according to Yomiuri.
  • Japan's government, which has previously subsidised TSMC's Kyushu expansion, is considering additional support for this new plan.
  • TSMC will discuss revisions to an earlier $12.2 billion plan for 6-12 nanometre capacity at its second Kyushu fab; Rapidus in Hokkaido is also being subsidised to produce advanced chips and is said to have distinct end uses.

TSMC plans to establish mass production of 3-nanometre chips in Kumamoto, on Japan's southern island of Kyushu, under a $17 billion investment, the Yomiuri newspaper reported on Thursday. The report indicates a material escalation from previously stated plans for mid-node capacity in the region and signals a shift toward more advanced process technology for production on Japanese soil.

Japan's government has already provided subsidies to TSMC to build out capacity in Kyushu and, according to the report, is considering further financial support tied to the new 3-nanometre proposal. The level and structure of any additional government assistance remain under consideration as officials evaluate the plan.

TSMC had earlier outlined investment of $12.2 billion aimed at 6-12 nanometre chipmaking capacity for its second fab in Kyushu. The Yomiuri account says the company will discuss alterations to that earlier $12.2 billion plan with the Japanese government, rather than proceeding unchanged. Details of those discussions, including timing and any reallocation of investment between sites or technologies, were not provided in the report.

TSMC did not immediately reply to requests for comment on the report. The Yomiuri report also noted Japan's substantial subsidy support for Rapidus, a homegrown foundry project located in Hokkaido that is intended to produce cutting-edge semiconductors. According to the report, Japanese authorities have concluded that TSMC and Rapidus will serve distinct end uses and will not be competing directly.

The report underscores that securing access to chips has become a government priority given their importance to the electronics, automotive and defence sectors. That priority is driving public-sector support for both foreign and domestic production initiatives in Japan.

This development adds to an ongoing policy emphasis on onshore chip production, reflected in subsidy programs and discussions between industry and government. The specific contours of the planned $17 billion investment, how it will relate to the previously announced $12.2 billion initiative, and the final form of any additional government support remain matters for further negotiation and confirmation.


Clear summary

Yomiuri reports that TSMC plans to mass produce 3-nanometre chips in Kumamoto with a $17 billion investment. Japan, which has subsidised TSMC's expansion in Kyushu, is considering extra support for the proposal. TSMC will review changes to an earlier $12.2 billion plan for 6-12 nanometre capacity with the government. Rapidus, a domestically subsidised foundry in Hokkaido, will pursue cutting-edge chips that Tokyo says will serve different applications than TSMC's output.

Impacted sectors

  • Electronics manufacturing
  • Automotive supply chain
  • Defence procurement and supply security

Risks

  • Uncertainty over whether and how Japan will provide additional subsidies to support the reported $17 billion plan could affect project economics and timelines - impacts sectors tied to chip supply such as electronics and automotive.
  • The outcome of discussions between TSMC and the Japanese government about changes to the previously announced $12.2 billion investment introduces execution risk for planned Kyushu capacity upgrades - affecting regional manufacturing deployment.
  • Although authorities have stated TSMC and Rapidus will not compete directly, potential overlap in advanced chip production strategies could create planning and policy uncertainties for Japan's semiconductor industrial strategy - relevant to defence and strategic supply considerations.

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