According to two insiders, TSMC is considering establishing advanced packaging capacity in Japan, which will add some momentum to Japan's efforts to revive its semiconductor industry.
According to an insider, TSMC is considering introducing its wafer based chip (CoWoS) packaging technology to Japan as an option.
TSMC will introduce CoWoS technology to Japan?
CoWoS is a high-precision packaging technology that stacks chips together, which can improve processing power while saving space and reducing power consumption. Currently, all of TSMC's CoWoS production capacity is located in Taiwan.
With the booming development of artificial intelligence, the global demand for advanced semiconductor packaging has surged, prompting chip manufacturers such as TSMC, Samsung Electronics, and Intel to open new factories to increase production capacity.
In January of this year, TSMC President Wei Zhejia stated that the company plans to double CoWos production this year and further increase production by 2025.
The construction of advanced packaging capacity will expand TSMC's business in Japan. Previously, TSMC had just built a chip manufacturing factory in Japan and announced that it would build another one. Both factories are located in the southern part of Kyushu Island, the center of Japanese chip manufacturing. TSMC also established an advanced packaging research and development center in Ibaraki Prefecture, northeast Tokyo in 2021.
In addition, TSMC is establishing joint ventures with companies such as Sony and Toyota, with a total investment expected to exceed $20 billion.
Domestic demand in Japan or a problem
A senior official from the Japanese Ministry of Economy, Trade and Industry stated that the Japanese government will welcome TSMC to introduce advanced packaging industries and actively provide support for its ecosystem.
Japan has leading semiconductor materials and equipment manufacturers, and its investment in chip manufacturing capabilities is also increasing, which are seen as favorable conditions for Japan to play a greater role in the advanced packaging field.
However, Joanne Chiao, an analyst at research firm TrendForce, said that if TSMC plans to establish advanced packaging capacity in Japan, she expects the scale to be limited.
She pointed out that most of TSMC's current CoWoS customers are in the United States, and it is currently unclear how much demand there is for CoWoS packaging in Japan.
According to two other informed sources, in addition to TSMC, Intel and Samsung Electronics are also considering establishing an advanced packaging research institution in Japan to deepen their connections with local chip supply chain companies.