Chip major TSMC (NYSE:TSM) has announced that it plans to build its second Japanese plant by the end of 2027, bringing its total investment in the Japanese venture to over $20 billion. TSMC’s majority-owned manufacturing subsidiary, Japan Advanced Semiconductor Manufacturing (JASM), will build the second fab, which has strong support from the Japanese government.
With this investment, TSMC, Sony Semiconductor Solutions (SSS), DENSO Corp., and Toyota (NYSE:TM) will hold equity stakes of around 86.5%, 6%, 5.5%, and 2% in JASM, respectively. The construction of the second fab is expected to begin by the end of this year, while JASM’s first fab is likely to begin operations this year.
TSMC is building the second fab to expand its production capacity to meet the rising demand for semiconductors. The fab site in Japan will offer 100,000 12-inch wafers per month for various applications. The production capacity plan may be adjusted based on customer demand.
Is TSM a Buy, Sell, or Hold?
Analysts remain bullish about TSM stock with a Strong Buy consensus rating based on five Buys. Over the past year, TSM stock has surged by more than 30%, and the average TSM price target of $138.60 implies an upside potential of 16.66% at current levels.
