TSMC may build a second factory in Japan

Source: Mantianxin

    As TSMC is rushing to build a new 2-nanometer factory, there is also new news about its overseas layout. It is rumored that it will announce the construction of Kumamoto II factory in Japan as soon as February 6th, and it is not ruled out the introduction of a 7-nanometer process.

    Regarding related rumors, TSMC‘s spokesperson system stated that TSMC‘s global manufacturing expansion strategy is based on customer demand, business opportunities, operational efficiency, local support, and economic costs. Through necessary investments, TSMC continues to support customer demand and respond to the structural growth of long-term demand for semiconductor technology, We are currently focusing on evaluating the possibility of setting up a second wafer fab in Japan, and there is no further information available for sharing.

    TSMC‘s Kumamoto plant in Japan will hold an opening ceremony on February 24th. TSMC Chairman Liu Deyin, who will retire after the June shareholders‘ meeting, along with current President Wei Zhejia, will lead multiple first level executives to Japan to attend.

    According to the Japanese media "Kumamoto Daily News", TSMC is evaluating the construction of its second factory, which will be located in Kiyoyo cho, Kumamoto Prefecture. The location of Kumamoto‘s second factory will be announced as soon as February 6th. The report points out that Kumamoto Plant 2 is expected to settle next to Plant 1, which was completed by the end of last year. TSMC has previously stated that if it wants to build a second factory, it will choose to be located around the factory under construction.

    It is understood that TSMC has decided to hold a board meeting in early February. At that time, in addition to possibly passing the Kumamoto II investment plan, it is expected to also pass the interest distribution in the fourth quarter of last year on the same day. Liu Deyin recently mentioned in a press conference that TSMC Japan‘s second plant plan is still under evaluation, but for the first time, she has relaxed her stance and stated that she does not rule out entering the 7-nanometer process.

    TSMC‘s visit to Kumamoto, Japan to build a factory was announced in October 2021 and construction began in 2022. Compared to TSMC‘s announcement of factory establishment in the United States in 2020, which was delayed in production until 2025 due to schedule delays, the Japanese factory is a latecomer, which is consistent with TSMC founder Zhang Zhongmou‘s statement last year that Japan is a more ideal place to establish a semiconductor supply chain.

    TSMC‘s combined revenue in the fourth quarter of 2023 was approximately NT $625.53 billion (approximately RMB 143.246 billion), an increase of 14.4% year-on-year and unchanged month on month. The net profit was NT $238.71 billion (approximately RMB 54.665 billion), an increase of 13.1% month on month and a decrease of 19.9% year-on-year.

    Meanwhile, TSMC‘s annual revenue for 2023 was NT $2161.74 billion (approximately RMB 495.038 billion), a year-on-year decrease of 4.72%. The net profit attributable to the listed company was NT $838.5 billion (approximately RMB 191.178 billion), a year-on-year decrease of 21.23%. The net profit margin is 38.8%, a decrease of 6.1 percentage points from 44.9% in 2022.

    In terms of capacity utilization, TSMC‘s 8-inch factory, which had previously experienced the fastest decline, is estimated to have returned to an average capacity utilization rate of 70-80% from January to February 2024, and 12 inches have also returned to the 80% mark. 28nm has returned to normal levels, while the 7/6nm process, which has fallen below 50% in the past year and a half, has risen to 75%. The 5/4nm family has exceeded expectations and is approaching 100% full load. The 3nm process, which is priced at nearly $20000, has exceeded 70% in January and is estimated to reach over 85% in the first quarter.

    TSMC‘s processes below 7nm currently account for about 60% of revenue, and with the increase in 5/3nm production capacity, the proportion will further increase, which is the key to TSMC‘s annual revenue growth of over 20%.