Outbound TSMC Thriving In Japan, Stalling In US

Construction of TSMC's first factory in Kumamoto began in April 2022 and has been running flat out ever since. According to the Japanese media, hundreds of TSMC technicians have been dispatched from Taiwan to manage the project and hundreds more from TSMC's suppliers will follow. In addition, TSMC has so far trained more than 300 Japanese workers in Taiwan.

Installation of equipment in Kumamoto is scheduled to begin this month and should be completed by next spring. Production appears likely to start before the end of 2024 deadline.

Meanwhile, in the US, progress has been delayed by what TSMC calls a shortage of skilled workers. That shortage has been aggravated by bureaucratic red tape and local labor unions that oppose the use of imported workers.

The labor unions have also complained about poor organization, lax safety standards and unreasonable working hours. American media reports extensive use of non-union migrant and out-of-state workers.

The Biden administration's vocal support for unionized labor may be one reason for the problem. Last December, Biden said,“The reason why business should be hiring union folks, if you don't mind my saying, is simple: They're the best in the world. They're the single-greatest technicians in the world.”

Europeans, Japanese, South Koreans and Chinese might beg to differ. Whatever the reasons, TSMC has postponed the start of commercial production in Arizona from 2024 to 2025.

Meanwhile, Japanese and foreign equipment makers are expanding their presence in Kumamoto in preparation for new demand born of the TSMC joint venture. TSMC is driving a new wave of growth on Japan's
“Silicon Island”
of Kyushu, which is already an important center of semiconductor production.

Tokyo Electron, Japan's largest producer of semiconductor equipment, is building a new facility for the development and manufacture of photoresist coater/developers in Kumamoto. Scheduled for completion by the end of 2024, it will double the size of its operations in Kyushu. Tokyo Electron dominates the global market for coater/developers.

Ebara, the second largest maker of chemical mechanical planarization (CMP) equipment after Applied Materials of the US, has begun construction of a new factory in Kumamoto that will increase its CMP production capacity by about 50%. Complemented by new R&D facilities in Fujisawa near Tokyo, it should also come online by the end of 2024.

Disco, the world's leading maker of semiconductor wafer dicing, grinding and polishing equipment and related consumables, has officially opened its Mid-Process Research Center in Kumamoto. The center, which had been operating under Covid-related health constraints since December 2021, was made available to customers and other visitors in July.

The purpose of this facility is to improve the transition from the“front-end” process of fabricating numerous semiconductor devices on silicon or other types of wafers and the“back-end” process of dicing (wafer singulation through cutting, separating individual die for packaging in chips) in which Disco specializes. The goal is to keep yields high by preventing deterioration of the wafer.

The mid-process R&D center also makes verification of unmanned operations possible by connecting a series of processes with a transfer robot. These processes include thinning the wafer with a grinder, singulation using blade dicing and laser saws, and pick-up, inspection and measurement of die.

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Screen Holdings, the world's leading maker of semiconductor cleaning equipment, opened a new training center at its Kumamoto facility in June.

ASML plans to expand its support and service capacity in Kumamoto. Photo: ASML

The Netherlands' ASML, the top maker of semiconductor lithography systems, and Lam Research, the leading US maker of etching equipment, plan to expand their support and service capacity in Kumamoto. Applied Materials, the world's largest maker of semiconductor production equipment, and KLA, the leading maker of semiconductor inspection equipment, also have offices there.

In Kumamoto, TSMC is working with Sony and Denso (which is affiliated with Toyota) – two major Japanese corporations that are both shareholders and the largest prospective customers of the venture. It will be expanding its IC foundry services for both of them a short distance from Taiwan in a similar corporate and social environment, without adversarial management–union relations. In Arizona, TSMC owns 100% of its new venture.

In Dresden, Germany, where TSMC plans to establish a joint venture with Bosch, Infineon and NXP called
European Semiconductor Manufacturing Company , TSMC will also be working with strong local partners who are both investors and customers. It seems likely that the Germany-based project, like the one in Japan, will also go more smoothly than the stalling one in Arizona.

Follow this writer on Twitter: @ScottFo83517667

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