TSMC to Produce 3nm AI Semiconductors in Japan [2026]

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TSMC to Produce 3nm AI Chips in Japan — Kumamoto Plant Plan Changes

  • TSMC will produce 3nm semiconductors at its second Kumamoto plant.
  • This is a change from the original 6-7nm plan, driven by the surge in AI demand.
  • The Japanese government will provide subsidies of up to 1.2 trillion yen.

Kumamoto’s Second Plant Upgraded to 3nm

On February 5th, TSMC announced that it would produce 3nm semiconductors at its second plant in Kumamoto Prefecture, Japan. Originally, the plan was to manufacture only 6-7nm chips. The plan was changed due to the explosive increase in AI demand.[Nikkei Asia]

After temporarily halting construction at the end of last year, the plant entered a redesign phase to install advanced equipment. 3nm is currently the most advanced process available for mass production. It’s a core technology supplied to companies like Nvidia and Apple.[AP통신]

Japan’s Semiconductor Economic Security Strategy

Prime Minister Sanae Takaichi assessed this decision as “highly significant from an economic security perspective.” The Japanese government has pledged subsidies of up to 1.2 trillion yen (approximately $7.9 billion) for the two TSMC plants.[Washington Post]

Sony, Denso, and Toyota are participating in TSMC’s Japanese subsidiary (JASM). This is a strategy to reduce the risk of concentration in Taiwan and to shorten the distance between customers and the supply chain.

AI Chip Demand and TSMC’s Expanded Investment

TSMC has set its capital expenditure for 2026 at $52 billion to $56 billion, an increase of approximately 40% compared to the previous year. In the fourth quarter of 2025, revenue reached $33.73 billion and net profit reached $15.2 billion, representing growth of 20.5% and 35%, respectively.[AP통신]

Chairman Wei Zhejia dismissed concerns about a bubble, saying that “customer AI demand is real.” Processes of 7nm and below account for 77% of wafer revenue.

Frequently Asked Questions (FAQ)

Q: When will TSMC’s second Kumamoto plant be operational?

A: The exact timing is undisclosed. Construction is scheduled to begin in the fall of 2025, and the plant is being redesigned for 3nm equipment. TSMC’s Arizona plant in the United States is scheduled to begin 3nm production in 2027, so the timing may be similar. The Japanese government is also strengthening subsidy support to accelerate operations.

Q: How are 3nm semiconductors different from existing chips?

A: The smaller the nanometer, the more transistors can be packed densely. 3nm is currently the highest level available for mass production. It processes more calculations in the same area and improves power efficiency. This is a core process for AI model training and inference.

Q: Why is Japan attracting TSMC?

A: Japan’s semiconductor manufacturing capabilities have weakened since the 1990s. It aims to strengthen economic security by producing advanced chips domestically. It also aims to prepare for risks in the Taiwan Strait and establish a stable chip supply chain for companies such as Sony and Toyota.

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