Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC), the largest contract manufacturer of semiconductors, will hold an opening ceremony at its semiconductor factory in Kikuyo-cho, Kumamoto Prefecture tomorrow. The factory is a major project with public and private cooperation, with the government investing a large sum of money in subsidies.Even though the labor shortage in the construction industry has been pointed out, in April 2022,Start of constructionThe construction was completed as planned in less than two years, thanks in part to the efforts of private companies such as the Sony Group and Kajima Corporation, which have extensive knowledge of domestic semiconductor production.
At peak times, more than 7,000 workers were working on construction at TSMC’s Kumamoto factory, which stands between fields, working in three shifts 24 hours a day. The sight of the lights reflecting in the night sky and the vehicles passing by was locally known as the “nightless castle.”
TSMC’s Kumamoto factory undergoing construction around the clock (May 2023)
Photographer: Toru Hanai/Bloomberg
Sony G and Toyota Motor Corporation will also invest in the TSMC subsidiary that operates the factory. Once operational, it is expected to become one of Japan’s leading semiconductor supply bases.
According to Kashima, who was in charge of the construction, it was a “super-large-scale construction project,” and it was almost TSMC’s first experience building a new base overseas. One of the factors that made this not an easy project go smoothly was the contribution of Sony Group.
Preparations began in 2021. At the beginning of the same year, TSMC informed the Ministry of Economy, Trade and Industry, which had been making efforts for a long time to attract the company, that it was ready to expand into Japan on the condition that it team up with Sony. After being persuaded by both parties, Sony also decided to cooperate.
In July of the same year, Sony G informed Kikuyo Town of its desire to acquire the land, and land preparation began in September. It wasn’t until about two months later that people in the town learned that TSMC, not Sony, was building a factory on the site.
At the factory design stage, a wide range of coordination issues arise, including development and building permits from the local government, water intake and drainage, etc. Sony G also helped in these areas. According to Sony Semiconductor Solutions, the company’s semiconductor subsidiary, it has helped set up the Kumamoto factory by leveraging its know-how in operating factories in Japan.
The presence of local partners appears to have been important for TSMC. He also proceeded with the construction of a semiconductor factory in Arizona, but he had difficulty obtaining permits.Lack of skilled labor and higher costs than in Taiwan are issues, and according to the announcement, mass production will start from the end of 2024 to 2025.backward shiftHe says he will.
Business with national prestige at stake
The Ministry of Economy, Trade and Industry regards semiconductors as an important commodity for economic security, and will focus on strengthening domestic production systems. The plan is to provide up to 476 billion yen in subsidies for TSMC’s first factory. The Kumamoto factory is an important project that puts Japan’s prestige at stake, and the morale of the national and local governments is high.
TSMC logo
Photographer: An Rong Xu/Bloomberg
Kumamoto Prefecture Governor Ikuo Kabashima said in an interview last April, “Completing the work properly and on time will lead to trust in Kumamoto.” In addition to expectations from the government, Kajima was able to complete the construction despite headwinds such as labor shortages and rising material prices.
Construction was carried out 24 hours a day throughout the construction period, gathering people, materials, and equipment from outside the prefecture. The workers reportedly had difficulty coordinating their work shifts and providing health and other care for the workers. A person in charge at Kajima recalls that the company needed to use all of its resources to respond.
“I felt the spirit of collecting as many people as possible and moving forward as quickly as possible.” Regarding the Kumamoto factory construction project, Kazuhisa Matsuda, executive director of NowPlus, a construction staffing company in Hyogo Prefecture, says the following.
The company sent dozens of people from all over the country to work inside the clean room and bring in materials. The cost per unit of work was incomparably higher than other sites, and the working environment was also good. Mr. Matsuda recalls that the level was on a completely different level compared to all the other sites he had experienced.
According to people involved in the work, there were times when there was not only a shortage of manpower, but also a surplus of manpower.
Differences with the Arizona factory
Analyst Qiao An of TrendForce, a Taiwanese research company, said the reason why the construction of the Kumamoto factory went smoothly was that it was a joint venture with local companies such as Sony G, and that the government subsidy process was smooth. etc. The Arizona factory points out that infrastructure such as high-voltage cables is difficult to install, and labor law issues and the government subsidy process are complicated and restrictive.
As a result of strong support from the public and private sectors, the Kumamoto factory startup project is progressing smoothly, but there are still hurdles to overcome. The next challenge was transporting and installing the equipment.
Kazuyoshi Saito, a senior analyst at Iwai Cosmo Securities, expressed the view that if Sony G cooperated, they would have the know-how to transport the equipment, but pointed out that there was a risk as to whether “the equipment would arrive on time.” Japanese manufacturers have fewer delays in delivery dates, but overseas manufacturers have the possibility of this.
In addition, great care must be taken when connecting the power supplies and piping for over 1,000 devices. Startup work continues 24 hours a day, including weekends, in four shifts, placing a heavy burden on the engineers on site. In order to overcome the difficulties and reach the start of operations by the end of 2024, continued collaboration between TSMC and Sony G will be essential.
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