Wei Zhejia meets with Takashi Sasaki: "Kumamoto to build 3nm factory," Japanese investment soars by $17 billion

TSMC CEO Wei Zhejia personally announced on Thursday in Tokyo that the process for Japan’s second wafer fab in Kumamoto will be significantly upgraded from the originally planned 7 nanometers to 3 nanometers, with total investment increased to 2.6 trillion yen (approximately $170 billion). This move not only marks a new milestone in TSMC’s global advanced process layout but also injects key momentum into Japan Prime Minister Sanae Takaichi’s semiconductor revival strategy.
(Background: TSMC teams up with Marvell to launch “2nm + silicon photonics” plan to dominate ASIC chip market share worldwide)
(Additional context: Trump’s semiconductor tax opens at 100%, what can the cryptocurrency world profit from?)

Table of Contents

• Sanae Takaichi’s semiconductor ambitions achieve a critical victory
• The upcoming general election, timing is intriguing
• The deep strategic logic behind global expansion

TSMC’s Japan deployment receives a major upgrade. As a core manufacturing partner of Nvidia and Apple, TSMC originally planned to produce 7nm chips at its second wafer fab in Kumamoto, Kyushu, with operations expected to start by the end of 2027. Now, it will leap directly to advanced 3nm process technology. According to Yomiuri Shimbun, to support this expansion, TSMC plans to raise total investment in the southern Japan plant to 2.6 trillion yen (about $170 billion).

Sources familiar with the matter revealed that the plan is still in early negotiations, and final details may be adjusted. TSMC’s stock in Taipei fell about 1.1% on the same day, while semiconductor equipment suppliers Tokyo Electron, Advantest, and Screen Holdings also declined, mainly due to the global tech stock sell-off.

Sanae Takaichi’s semiconductor ambitions achieve a critical victory

TSMC’s process upgrade undoubtedly provides strong support for Prime Minister Sanae Takaichi’s push for a domestic chip manufacturing strategy. Under her leadership, Japan’s Ministry of Economy, Trade and Industry has significantly increased budgets for advanced semiconductor and AI R&D to approximately 1.23 trillion yen—nearly quadrupling the previous fiscal year, effective from this April’s new fiscal year.

During a meeting in Tokyo on Thursday, Takaichi highlighted Kumamoto as a model for economic cooperation, emphasizing that the 3nm factory will simultaneously strengthen the global chip supply chain and Japan’s economic security.

“We look forward to further deepening mutually beneficial partnerships,” she said at the start of the meeting.

Wei Zhejia responded that without support and assistance from the Japanese government, “this super wafer plant project simply cannot become a reality.” He described himself as a “firm supporter” of Sanae Takaichi and even showed her book, Beautiful, Strong, and Growing: My Japan Economic Resilience Plan, joking, “In your book written five years ago, TSMC was already mentioned.”

The upcoming general election, timing is intriguing

It’s worth noting that TSMC’s major announcement coincides with Japan’s House of Representatives election this weekend. Prime Minister Sanae Takaichi, who has been in office for just over three months, has set the voting date for February 8, aiming to solidify her ruling coalition through rising public support. TSMC’s endorsement at this moment undoubtedly adds a boost to her campaign.

The deep strategic logic behind global expansion

As the highest-valued company in Asia, TSMC is accelerating its global capacity build-out to meet the surging demand for high-end chips used in AI training and operation. Meanwhile, Taiwan faces increasingly severe bottlenecks in land and electricity supply, and the concentration of advanced processes on this island, which Beijing claims sovereignty over, continues to raise concerns about supply chain resilience.

Omdia analyst Akira Minagawa pointed out that rising geopolitical risks around Taiwan, coupled with faster-than-expected adoption of advanced technologies, are driving this new plan. “This could further promote discussions about manufacturing even more advanced process nodes in Japan,” he said.

Japan’s Minister of Economy, Trade and Industry, Yasutoshi Nishimura, stated that 3nm semiconductors could be applied in AI robots and data processing, and Japan will work more closely with TSMC. He believes TSMC’s upgrade “completely aligns with the government’s strategic direction to promote AI socialization applications.”

Although Taiwan’s government and TSMC have repeatedly promised to keep the most advanced technology domestically, TSMC still plans to expand capacity for more mature processes overseas to ease domestic pressure. The company began mass production of 2nm chips at its Kaohsiung plant in Q4 last year.