TAIPEI (Taiwan News) — TSMC plans to build Japan’s first mass-production plant for advanced 3 nm chips in Kumamoto, CNA reported Thursday.

A source familiar with the matter said the world’s largest contract chipmaker has told the Japanese government the project could involve up to NT$537.63 billion (US$17 billion) in equipment investment, per Yomiuri Shimbun. Officials are weighing additional state support.

TSMC CEO and Chair C.C. Wei (魏哲家) is expected to brief Prime Minister Takaichi Sanae on the revised plan on Thursday, per Kyodo News.

TSMC had initially planned for its second Kumamoto plant to make 6 to 12 nm chips with about NT$386.56 billion in investment. The company has since upgraded the project to 3 nm production and will revise its business plan with Japan’s trade ministry, industry experts said.

Such advanced chips power applications such as AI, autonomous driving and robotics, and Japan lacks mass-production capacity at that level. The project would close a key gap in the country’s manufacturing base.

Japan is also backing Rapidus, a potential competitor, which plans to mass-produce 2 nm chips in Hokkaido in 2027. Officials said the two projects target different markets and are unlikely to compete.

TSMC makes its 3 nm chips in Taiwan and plans to also make them in its second fab in Arizona in 2027, per Reuters.