TSMC to Delay Construction of Second Kumamoto Plant

TSMC is accelerating the construction of its new facility in the United States, while also ramping up efforts in its Taiwan operations. However, reports indicate that the timeline for the second wafer plant in Kumamoto, Japan, will be postponed as the company reassesses its overall semiconductor development strategy and global positioning.

Originally scheduled to break ground in the first quarter of 2025, TSMC's subsidiary, JASM, has now revised the start date for the Kumamoto second plant to later in 2025. TSMC has confirmed that the "overall plan for the second Kumamoto plant remains unchanged," though it stopped short of confirming or denying the revised timeline for construction.

This response has left room for speculation, with industry experts suggesting that, despite the unchanged plan, TSMC could be adjusting its international expansion strategy in response to evolving global market dynamics. Two key factors likely play a role in this decision.

First, increasing geopolitical tensions and the growing investment interest in the U.S. market by automotive clients are influencing TSMC's priorities. Analysts suggest that TSMC's potential automotive customers in Japan are showing a stronger inclination to expand production in the U.S., prompting the company to focus resources on the critical new U.S. facility.

Second, the sluggish demand in the automotive semiconductor market and rising competition have made it a rational decision to delay the Kumamoto second plant's construction. With significant portions of the Japanese plant's production targeting the automotive sector, any dip in market demand would naturally lead to a reevaluation of the construction schedule.