TSMC plans to open a 3D wafer material research and development subsidiary in Japan to widen the gap with Samsung.

(TSMC), the world's largest contract chip manufacturer, said on Tuesday that it plans to open a materials research subsidiary in Japan for about $178 million in an effort to strengthen exploration of 3DIC (3D wafer) materials with Japanese ecosystem partners. TSMC's move is expected to widen the technology gap between TSMC and its rival Samsung Electronics in South Korea.

TSMC said in a board statement that the board had approved the establishment of a wholly owned subsidiary in Japan to expand research on three-dimensional integrated circuit (3DIC) materials with paid-in capital of no more than 18.6 billion yen ($178 million).

According to previous media reports, TSMC will set up an R & D facility in Tsukuba City, Ibaraki Prefecture, northeast of Tokyo. The investment is expected to be completed this year, but TSMC has not released details such as the size of the personnel of the proposed subsidiary.

For TSMC to set up a material research and development center in Japan, some experts say that three-dimensional wafers are becoming more and more important, especially materials closely related to heat dissipation, and materials are the strengths of Japanese industry and academia. TSMC's advanced process combined with the strength of Japanese materials will help TSMC widen the technology gap with its rival Samsung and play a leading role in the field of semiconductor manufacturing.

The company also said that the board of directors had approved the allocation of about $11.79 billion of capital for plant construction, installation and upgrading of advanced technology capacity, as well as "R & D capital investment and recurrent capital budget for the second quarter of 2021".

In addition, TSMC's board of directors has approved the issuance of unsecured corporate bonds in China of no more than NT $120 billion (US $4.4 billion) and approved the issuance of unsecured corporate bonds of no more than US $4.5 billion for the company's wholly-owned overseas subsidiary TSMC Global. The company said the funds raised would be "used for TSMC capacity expansion and / or expenditure related to pollution prevention", but did not elaborate.

TSMC said in January that it expected to increase capital expenditure on advanced chip production and development to $25 billion-$28 billion this year, 60 per cent higher than in 2020. It is reported that in the environment of the epidemic, the market demand for advanced semiconductor equipment and materials is becoming higher and higher.

Technology companies, including TSMC, benefited from the surge in global demand for chips for laptops, tablets, smartphones and other products during the coronavirus pandemic. At the same time, these companies are also trying to solve the problem of chip shortage among carmakers.

TSMC last month reported its best quarterly profit ever and raised its revenue and capital expenditure forecasts to record levels as it expected "multi-year growth opportunities".

TSMC shares did not change much on Tuesday, having risen more than 130% in the past year.