On March 6th, it was reported that as countries around the world rushed to offer subsidy policies to develop their domestic semiconductor manufacturing industry, TSMC has become a major target for the governments of the United States, Japan, and Germany to invest and establish factories locally, which has also led to TSMC receiving a large amount of government subsidies. TSMC's government subsidies from Chinese Mainland and Japan in 2023 have surged to NT $47.545 billion (about 10.84 billion yuan), up 5.74 times year-on-year.

According to the financial report data of TSMC, in 2023, TSMC's Japanese subsidiary JASM and its Nanjing subsidiary in China obtained subsidies from the Japanese and Chinese Mainland governments, mainly including the acquisition costs of real estate, plant and equipment, as well as some costs and expenses for building plant and production operations.

TSMC pointed out that in 2022, it received about NT $7.051 billion in government subsidies from Japan and Chinese Mainland, while in 2023, it received NT $47.545 billion in subsidies from Japan and Chinese Mainland, a substantial increase of 40.494 billion, or 5.74 times. Although TSMC did not specify the amount of subsidies for Japan and Chinese Mainland respectively, the previous data showed that the Japanese government decided to subsidize the first TSMC Kumamoto plant up to 476 billion yen (about NT $100.4 billion, about NT $22.95 billion, which will be subsidized in stages), which should also be the main reason for the sharp increase of TSMC government subsidies in 2023.

According to data, TSMC officially announced the construction of its first wafer fab in Kumamoto in November 2021, and introduced Sony Semiconductor Solutions and Denso as joint venture shareholders with a total investment of $8.6 billion. In April 2022, the wafer fab officially started construction. With 24-hour shifts, the construction project was completed in 1 year and 8 months. It was officially unveiled and completed on February 24, 2024, and is expected to enter mass production by the end of 2024. The planned production capacity is 55000 pieces of 12 inch wafers per month, using 22/28nm to 12/16nm process technology. According to the news, the Japanese government will provide a subsidy of 476 billion yen to TSMC Kumamoto wafer factory, accounting for approximately 40% of the total investment.

In addition, by the end of 2024, TSMC will also build a second wafer fab in Kumamoto and add Toyota as a shareholder. It is expected to start mass production by the end of 2027, when the 6/7nm and 40nm processes will be produced.

Japanese Prime Minister Fumio Kishida announced in a pre recorded video of the opening ceremony of TSMC Kumamoto wafer fab 1 that the Japanese government has decided to support TSMC's construction of Kumamoto wafer fab 2. After the meeting, Minister of Economy, Trade, and Industry, Kenzo Saito, stated that the Japanese government has approved a subsidy of 732 billion yen (approximately NT $153.8 billion) to support TSMC's construction of Kumamoto wafer fab 2.

TSMC's subsidy from Chinese Mainland in 2023 mainly comes from the expansion project of Nanjing Plant. As early as April 2021, TSMC announced that it would invest $2.887 billion in capital expenditure to expand its 28nm mature process at its Nanjing plant to meet the increasing structural demand and address the challenge of expanding global chip supply from a shortage of automotive chips. It is expected to start mass production in the second half of 2022 and achieve full production by mid-2023, reaching 40000 chips per month.

Currently, TSMC is investing $40 billion in the United States to build an Arizona wafer plant, with plans to mass produce 4nm and 3nm. Recent rumors suggest that Intel is expected to receive approximately $10 billion in subsidies under the US Chip Act. If estimated based on Intel's investment and the amount of subsidies received, TSMC is also expected to receive nearly $10 billion in subsidies.

In addition, TSMC has partnered with Infineon, NXP Semiconductor, and Bosch to invest 10 billion euros in building a semiconductor factory in the eastern German city of Dresden. The German government will also provide approximately 5 billion euros in subsidies.

Therefore, TSMC is expected to receive further government subsidies from various countries in the coming years.

.About The Author

This is reported by Top Components, a leading supplier of electronic components in the semiconductor industry. They are committed to providing customers around the world with the most necessary, outdated, licensed, and hard-to-find parts.

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Name: John Chen

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