(Image credit: TSMC)
TSMC is mulling upgrading the capabilities of its yet-to-be-built Fab 23 phase 2 in Japan in a bid to make chips on its N4 process technology (4nm-class) there, according to Nikkei. Advancing fab capabilities is hardly something unexpected for foundries like TSMC, as they tend to follow demand with their offerings. What is perhaps more surprising is that TSMC has removed heavy machinery equipment from the site and has notified suppliers that it would not need new fab tools in Japan throughout the whole 2026.
TSMC's Fab 23 phase 2 (aka JASM phase 2) near Kumamoto, Japan, was projected to make chips on N6 (6nm-class) and N7 (7nm-class) fabrication technologies, which would complement the capabilities of the company's Fab 23 phase 1 that processes wafers using 40nm, 28nm, 22nm, 16nm, and 12nm-class manufacturing processors. If the information from Nikkei is correct, then Fab 21 phase 2 will also add N4 and N5 capabilities to its list to make more advanced chips for Japanese customers.
Truth to be told, although N5/N4 and N7/N6 families of manufacturing technologies have completely different design rules and the former are substantially more advanced than the latter as they use up to 14 EUV layers, the equipment that they use is generally similar. As a result, TSMC's N5/N4 fabs reuse as much as 90% of the tools used by N7/N6 production lines, enabling relatively easy fab upgrades. That said, upgrading Fab 23 phase 2 to N4 and N5 should not be a big challenge for TSMC, but might require some redesigns as the N4 production line requires more EUV lithography tools, and these are physically larger than DUV tools. In fact, back in 2023, the company already mulled enabling N4 production in Kumamoto, so everything might be ready for the installation of more EUV scanners.
One interesting thing to note about TSMC's Fab 23 phase 2 is that while it entered the early phase of physical build-out in late October (according to Nikkei), photos taken at the site in November showed cranes, excavators, and piledrivers on site. However, images captured in early December reveal that nearly all heavy equipment has since been removed. Also, suppliers were notified that work would pause, although no reasons were provided. Furthermore, TSMC reportedly notified its tool suppliers that it would not need new equipment in Japan throughout 2026, which implies that it will not start equipping JASM phase 2 next year due to construction delay, which is barely news given all the information surrounding the facility.
We have contacted TSMC for a comment and will update the story once we hear back.