TSMC has announced it will produce advanced AI chips at its new fab in Kumamoto, Japan, reversing course on its previous plan to manufacture less powerful semiconductors at the facility.

The Taiwanese chipmaker will mass produce 3nm chips at the site, with investment in the fab expected to total $17 billion, local media reported.

The company had originally planned to make 7nm chips at the Kumamoto facility, with production slated for late 2027.

"We believe this fab will further contribute to the local economic growth and, most importantly, form a foundation for Japan's AI business," said TSMC chairman C.C. Wei during a meeting with Japan’s Prime Minister Sanae Takaichi in Tokyo this week.

TSMC first announced plans to open a second semiconductor fab in Kumamoto in February 2024 as part of its $20 billion planned investment in Japan. However, in July 2025, it was reported that the company had delayed construction at the site in order to prioritize the expansion of its manufacturing base in the US.

At the time, Wei blamed the delay on excessive car traffic in the region, a claim that was later refuted by the Japanese government, which said TSMC had not directly reported any traffic issues.