TSMC Upgrades Japan Fab Plan, Will Produce Advanced 3nm AI Chips in Kumamoto
February 5, 2026
In a strategic shift underscoring the geopolitical and commercial importance of securing cutting-edge semiconductor supply chains, Taiwan Semiconductor Manufacturing Company (TSMC) has announced it will manufacture its most advanced 3-nanometer artificial intelligence chips at its upcoming second fabrication plant in Kumamoto, Japan. The decision marks a significant upgrade from the previously planned 7nm technology and represents a major win for Japan's ambitions to reclaim leadership in advanced chip manufacturing.
The world's leading contract chipmaker confirmed the change in plans this week following a meeting in Tokyo between TSMC Chairman C.C. Wei and Japan's Prime Minister Sanae Takaichi. According to local media reports, the total investment for this upgraded facility is now expected to reach approximately $17 billion. This fab is part of TSMC's broader $20 billion investment strategy in Japan, initially announced in February 2024.
This reversal comes after a period of uncertainty. In July 2025, reports indicated TSMC had delayed construction at the Kumamoto site to prioritize its expansion efforts in the United States, with Chairman Wei citing regional traffic concerns—a claim later disputed by Japanese officials. The company had originally slated the now-scrapped 7nm production for late 2027. Speaking on the new 3nm plan, Wei stated, "We believe this fab will further contribute to the local economic growth and, most importantly, form a foundation for Japan's AI business."
The move to deploy 3nm production in Japan is a clear response to soaring global demand for high-performance chips that power AI servers and large language models. By situating this advanced manufacturing capability in Japan, TSMC not only diversifies its geographic footprint beyond Taiwan but also strengthens a key allied partnership. For Japan, securing onshore production of the world's most sophisticated semiconductors is a cornerstone of its economic security policy and a critical step towards rebuilding its domestic tech ecosystem. This facility will position Japan as a central hub in the global AI hardware supply chain, potentially attracting further downstream investments and R&D activities.
Source: datacenterdynamics
