Taiwan Semiconductor Manufacturing (TSM), the world’s largest contract chipmaker, extended its gains in premarket trading Wednesday, rising about 2% after reports that it plans to begin 3-nanometer chip production in Japan by 2028.
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According to a government filing, TSMC’s second factory in Japan will start equipment installation and mass production of 3nm wafers in 2028. This marks a shift from its earlier plans, which focused on older chip technologies.
The new facility is expected to produce around 15,000 12-inch wafers per month using advanced 3nm technology, a key node used in high-performance computing and AI applications.
TSMC Expands Japan Presence with Local Partnerships
TSMC has been expanding its presence in Japan with support from local partners. Its Japan unit was set up in 2021 with backing from Sony Semiconductor (part of Sony Group (SONY), while Denso Corporation (DNZOY) and Toyota Motor (TM) later joined as minority investors.
The company’s first plant in Japan started mass production in late 2024. Total spending on the two plants is expected to go over $20 billion, though the exact cost of the second plant has not been shared.
The move highlights TSMC’s push to expand advanced chip production beyond Taiwan, as demand for AI and high-performance computing continues to rise.
Is TSMC a Buy or Sell Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on TSMC stock based on seven Buys and one Hold assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSMC price target of $423.50 per share implies 25.31% upside potential.
