Taiwan's TSMC will formally open its new chipmaking foundry on Japan's Kyushu island on February 24, its chairman said Thursday, which is part of their plan to expand its global manufacturing footprint.

Taiwan Semiconductor Manufacturing Company—whose clients include Apple and Nvidia—controls more than half the world's output of silicon wafers, used in everything from smartphones to cars and missiles.

The company has in recent years had to navigate geopolitical tussles between the United States and China, as the two have faced off over a range of issues including technology imports, trade and Taiwan—the primary manufacturing base for TSMC.

On Thursday, during an investors call over fourth quarter earnings, Chairman Mark Liu announced the official date of the long-awaited Japan chip-fabrication foundry's opening ceremony would be February 24.

"In Japan, we are building a special technology fab in Kumamoto which will utilize 12- and 16-nanometer and 28- and 22-nanometer process technology," Liu said, using industry shorthand to refer to the fabrication foundry.

"We will hold an opening ceremony for this fab on February 24 next month and volume production is on track for fourth quarter of 2024."

He added that TSMC's expansion overseas is "based on our customers' needs and a necessary level of government subsidies for support".

"In today's fractured globalization environment, our strategy is to expand our global manufacturing footprint to increase our customers' trust, expand our future growth potential, and reach for more global talents," Liu said.

Japan's government said last year it plans to spent $13 billion to boost domestic production of strategically important semiconductors and generative AI technology.

'Challenging year'

The company also reported a 19.3 percent drop in net profits in the October-December period to Tw$238.7 billion ($7.6 billion), while its revenues were "essentially flat".

CEO C.C. Wei said that while 2023 was a "challenging year" for the global semiconductor industry, the rising demand for generative AI technology also means "we expect 2024 to be a healthy growth year for TSMC".

The chip industry has seen sluggish performance, which companies attribute to high inflation and slowing global economic growth caused in part by geopolitical tensions.

TSMC had sought to quell investor fears in the past by pointing to the increasing demand for AI-related products, like ChatGPT, which needs the high-performing silicon wafers to function.

© 2024 AFP