Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, has announced a delay in the opening of its second chip manufacturing plant in Japan.
This decision stems from a strategic shift to prioritize its substantial investments in the United States, primarily driven by concerns over potential tariffs and trade restrictions that could impact its chip exports to the US from other global locations. The US is reportedly weighing new tariffs on certain chip imports, with a decision anticipated by October.
TSMC is currently investing a massive $65 billion in constructing two advanced chip factories in Phoenix, Arizona, with the first US plant slated to commence mass production in the first half of 2025. These significant investments are supported by robust financial incentives from the US government, including $6.6 billion in grants and $5 billion in loans under the US CHIPS and Science Act.
In contrast, TSMC’s first Japanese plant in Kumamoto (Japan Advanced Semiconductor Manufacturing, or JASM), a joint venture with Sony, Denso, and Toyota, opened in February 2024. While a second Japanese plant (JASM II) was initially planned for operation by the end of 2027, this timeline will now be pushed back. Japan had offered substantial subsidies for both plants, including $7.3 billion for the first and $4.86 billion for the second.
The delay in TSMC’s second Japanese facility will undoubtedly impact Japan’s broader efforts to revitalize its domestic chip manufacturing industry. This strategic recalibration by TSMC underscores the complex interplay of global trade tensions, geopolitical considerations, and the intricate supply chain dynamics within the semiconductor industry.
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