The construction speed of Japanese wafer fabs is amazing!

Latest update time：2024-02-20

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With the full support of the Japanese government, TSMC's Kumamoto factory, which aims to "rebuild the semiconductor industry," is expected to be completed on Saturday. It has only been two years and four months since the construction plan was announced in October 2021, and one year and ten months have passed since the groundbreaking in April 2022. Considering that trial production started at the end of last year, the semiconductor factory was completed in 2017. Just 20 months—a remarkably quick feat for typically slow-moving and tightly regulated Japan.

Construction of the plant, originally expected to take five years, has progressed smoothly from planning and infrastructure development to groundbreaking and completion. The normal time from plan announcement to groundbreaking, usually two years, is now down to six months. Through day and night construction, the construction period was further shortened by two months. Local governments actively respond to challenges such as industrial water supply and road maintenance. In addition, the Japanese government has also provided strong support, providing 476 billion yen (approximately 4.24 trillion won) or 40% of the investment as subsidies.

In declaring a semiconductor renaissance, Japan began a joint effort between government and industry. It threw aside pride to support the semiconductor supply chain, offering massive tax breaks and backing factories built by foreign companies. Longstanding regulations that had been in place for more than 50 years were relaxed to allow high-tech factories, including semiconductor and battery plants, to be built on agricultural and forest land. The shift reflects Japan's intense reflection on its marginal status in the global semiconductor market since the 1980s after it was overtaken by South Korea and Taiwan.

In sharp contrast, South Korea is clearly lagging behind in the semiconductor competition. The SK Hynix semiconductor cluster in Yongin City, selected in February 2019, has not yet started formal construction. Construction was originally scheduled to begin in 2022, but has been delayed multiple times due to obstacles including local opposition, land compensation issues and water supply permits. Even if construction starts next year and operations begin in 2027, it will still take eight years. Similarly, Samsung Electronics' Pyeongtaek factory lost five years due to a dispute over a transmission tower.

Slow progress in South Korea's semiconductor industry is a recent problem. Forty-one years ago, after Samsung issued the "Tokyo Declaration" to enter the semiconductor business, it took only six months to build a semiconductor factory. This rapid construction was made possible by desperate solidarity between government and business. Last month, the government announced a plan to invest 662 trillion won in the development of semiconductor clusters by 2047. However, such ambitions remain ineffective without proper execution. In a world of rapidly changing technology, bold investments and fast action are critical to survival in the semiconductor sector.

US wafer fab construction is the slowest in the world

A report from the Center for Security and Emerging Technologies (CSET) concludes that U.S. fab construction is among the slowest in the world due to its confusing and complex regulatory policies. The report concludes that the CHIPS Act does not do enough to improve the cost and time of fab construction and recommends reforms at all levels of government to bring the United States on par with China, Europe and Taiwan.

The CSET study examined fab construction between 1990 and 2020 and concluded that of the approximately 635 fabs built during that time period, the average time between the start of construction and the start of production was 682 sky. Three countries or regions exceeded this benchmark: Taiwan, China, with an average of 654 days, South Korea, with 620 days, and Japan, with 584 days. Meanwhile, Europe and the Middle East had roughly the same number of days at 690 days, while mainland China had 701 days.

However, the length of stay in the United States is 736 days, which is much higher than the global average and second only to Southeast Asia's 781 days. If you look at specific decades, things look even worse. In the 1990s and 2000s, the pace of construction in the United States was quite fast, with the average construction time being about 675 days. In the 10s, this number increased dramatically to 918 days. Meanwhile, progress in Mainland China and Central Taiwan is much faster, with average completion times of 675 days and 642 days respectively.

Of course, the number of fabs in the United States has also declined. In the 1990s, 55 fabs were built in the United States, which dropped to 43 in the 2000s and to 22 in the 2010s. At the same time, China is accelerating the construction of wafer fabs on a large scale, from 14 in the 1990s, to 75 in the 2000s, and to 95 in the 2010s. Although China is still catching up in semiconductor technology, it is undoubtedly a dominant player in fab construction, which will at least be good for production capacity.

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