TSMC will produce cutting-edge AI semiconductors in Japan to support its chipmaking goals

TSMC to Manufacture 3nm AI Chips in Japan, Boosting Country’s Semiconductor Ambitions

Taiwanese chip giant TSMC will begin manufacturing some of the world’s most advanced semiconductors in Japan, deepening its global expansion and supporting surging demand driven by artificial intelligence.

The world’s largest contract chipmaker said it plans to produce 3-nanometer chips — among the most cutting-edge processors available today — at its second fabrication plant in Kumamoto Prefecture, currently under construction. These chips power AI systems, smartphones, robotics, and autonomous vehicles.

The move marks a major win for Japan’s efforts to rebuild its semiconductor ecosystem and strengthen economic security through domestic chip production.

Strategic win for Japan

The announcement came during a meeting in Tokyo between Prime Minister Sanae Takaichi and TSMC CEO and Chairman C.C. Wei.

“It is very meaningful from the perspective of Japanese economic security, and I would like the project to move forward as proposed,” Takaichi said.

Her government has identified AI, robotics, and self-driving technologies as priority sectors, making access to advanced chip manufacturing critical for future competitiveness.

Expanding global footprint

TSMC’s first Kumamoto plant, which began mass production in late 2024, currently manufactures older-generation chips. The new facility will significantly upgrade Japan’s capabilities by bringing next-gen 3nm production to the country.

Beyond Japan, TSMC is also expanding in the United States, where it is building multiple fabrication plants in Arizona to create a major manufacturing cluster aimed at meeting booming AI-driven demand.

Wei said Japan’s “forward-looking semiconductor policy” would deliver long-term benefits to the industry.

AI demand fuels spending surge

Despite concerns in some quarters about a potential AI investment bubble, TSMC remains bullish.

The company recently said AI demand from customers is “real” and accelerating. Riding that momentum, TSMC plans to increase capital expenditure by nearly 40% this year, with spending projected to rise to $52–$56 billion in 2026, up from $40 billion last year.

Meanwhile, Japan is backing its own domestic player Rapidus with heavy subsidies to accelerate local production of advanced chips.

With TSMC’s latest investment, Japan moves closer to reclaiming its place in the global semiconductor supply chain — this time powered by AI.