TSMC's Japan unit fab swings to profit in Q1
Taipei, May 16
The subsidiary of Taiwan Semiconductor Manufacturing Co in Kumamoto, Japan, turned a profit in the first quarter of this year, marking the first time the first fab of the unit become profitable since mass production started at the end of 2024, according to a report by Focus Taiwan.
According to contract chipmaker TSMC's financial statement released on Friday, Japan Advanced Semiconductor Manufacturing Inc (JASM), a joint venture running the fab in Kumamoto, posted NT$951 million (USD 30.19 million) in profit in the January-March period, compared with a loss of NT$1.39 billion (USD 44.13 million) in the previous quarter, and a loss of NT$3.25 billion (USD 103.17 million) in the first quarter of 2025.
Market analysts said the latest financial report from the first Kumamoto fab showed an improving production utilization.
The first Kumamoto fab uses mature processes, including 12-, 16-, 22-, and 28-nanometer processes, for the automotive and industrial sectors, according to TSMC, as reported by Focus Taiwan.
In addition to the first fab, JASM, in which TSMC owns a 77 per cent stake, has started construction of the second fab in Kumamoto.
Previously, the second Kumamoto fab would use the 6nm process, but the plan has been adjusted since February to use the advanced 3nm process in response to strong global AI demand.
In the United States, TSMC's wholly owned subsidiary, TSMC Arizona, posted NT$18.81 billion (USD 597.14 million) in profit in the first quarter, up from NT$11.37 billion (USD 360.95 million) in the previous quarter, and up sharply from NT$496 million (USD 15.75 million) over the same period of last year.
According to TSMC, the Arizona subsidiary's first quarter profit even surpassed the NT$16.14 billion (USD 512.38 million) recorded for the entire 2025.
Analysts said the Arizona fab benefited from the current AI boom, catering to its major clients in the US market.
TSMC's first fab in Arizona started mass production in the fourth quarter of 2024, using the 4nm process. The second fab is slated to begin commercial production in the second half of 2027, using the 3nm process.
Construction of the third fab in Arizona has started, while the chipmaker has filed applications to build the fourth fab, and the first IC assembly plant in the US state.
TSMC has planned to spend USD 165 billion to build six advanced fabs, two IC assembly plants, and a research and development centre in Arizona.
In Dresden, Germany, European Semiconductor Manufacturing Co. (ESMC), in which TSMC owns a 70 per cent stake, incurred NT$278 million (USD 8.83 million) in losses in the first quarter, with construction of a fab still underway.
According to TSMC, it received NT$505 million (USD 16.03 million) in subsidies from the governments of the US, Japan and Germany for its investments in these countries in the first quarter, falling sharply by 98.56 per cent from a year earlier.
— ANI
Reader Comments
The Arizona fab is clearly riding the AI wave 💪. But look at the subsidies—NT$505 million vs last year's same quarter! Only 1.44% retained. Governments in US, Japan, Germany are scaling back once fabs start earning. Smart move by TSMC to diversify globally but they're also taking risk.
TSMC planning $165 billion in Arizona for six fabs, two assembly plants, and R&D centre! That's almost India's entire defence budget for a year 🫡. Meanwhile, we're still trying to get a decent semiconductor fab off the ground. Need more aggressive PLI schemes and quicker approvals.
Interesting that JASM switched its second Kumamoto fab from 6nm to 3nm due to AI demand. TSMC is clearly betting big on advanced nodes globally. But for India, 28nm and 40nm fabs would serve our automotive and electronics sector well—no need to copy-paste their strategy blindly.
Taiwan's semiconductor dominance is undeniable. TSMC's global expansion to Japan, US, Germany shows they're hedging against geopolitical risks. The Arizona fab profitability jump from NT$496M to NT$18.81B in one year is staggering—AI boom is real. India needs to attract such investments.
People talk about TSMC's success, but the German fab (ESMC) is still losing NT$278M in Q1. Chip fabrication is capital-intensive and takes years to break even. India shouldn't expect quick returns from our proposed fabs—patience and consistent policy support is key. 🧘
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