TSMC Evaluates 3nm Process for Second Japan Wafer Fab
TSMC has revealed plans to transition its second wafer fab in Kumamoto, Japan, to 3 nanometer 3nm process technology. TSMC Chairman and President C.C. Wei discussed this potential upgrade with Japanese Prime Minister Sanae Takaichi, citing the necessity to meet surging demand for Artificial Intelligence AI hardware.
The primary driver for this shift is the massive demand from US based AI customers, specifically Nvidia. The production of six new chips for the Vera Rubin architecture is entering mass production by Nvidia, which depends on TSMC's advanced process capacity that currently remains inadequate. TSMC gains operational advantages through its 3nm production at the Kumamoto facility, which enables better capacity distribution across its worldwide business activities.
Experts suggest that deploying advanced 3nm capacity in Japan, alongside existing expansions in Taiwan and the United States, helps TSMC diversify its geographic risks. The strategy enables clients to maintain operations during supply chain interruptions that occur because of insufficient capacity.
While the initial focus is on US AI giants, the Kumamoto fab is expected to eventually serve Japanese industries. Future applications are likely to focus on
- Robotics Providing high performance chips for advanced automation.
- Autonomous Vehicles Supporting the computational needs of next generation edge computing in transport.
TSMC’s expanded investment is expected to strengthen the Japanese semiconductor supply chain and provide a boost to the local economy. The process of moving to advanced processes requires organizations to overcome multiple operational challenges, which include
- Ensuring stable and massive supplies of water and electricity.
- Meeting stringent environmental protection standards.
- Sourcing specialized semiconductor talent.
The meeting between CC Wei and Prime Minister Takaichi indicates a push for central government support to overcome these infrastructure and resource challenges.
As of the fourth quarter of 2025, 3nm technology accounted for 28% of TSMC's total revenue, trailing only the 5nm process 35%. The Southern Taiwan Science Park facilities handle the majority of current 3nm production activities. TSMC will start using 3nm technology at its Arizona facility during the second half of 2027. The Dresden plant in Germany will eventually need to change its operational schedule to add advanced processes to meet international artificial intelligence requirements.
