TSMC concentrates on the US, delaying the new chip plant in Japan

TSMC delays Japan chip plant for US priority, influenced by looming tariffs, affecting $20B plan.

: TSMC is prioritizing its semiconductor manufacturing expansion in the United States, delaying the construction of its second chip plant originally planned for Kumamoto, Japan. The decision is driven by impending US tariffs on imported chips, encouraged by the Trump administration's call for local production, which could reach 100 percent. TSMC remains committed to its significant investment in the US, adding an extra $100 billion to the $65 billion already planned, with three new factories in Arizona underway. Despite Japan's government's opinion that the timeline remains unchanged, TSMC's realignment highlights strategic shifts amidst global economic pressures.

TSMC, a leading global semiconductor manufacturer, is refocusing its strategic efforts towards expanding operations within the United States, consequently causing a delay in the construction of a second chip manufacturing facility in Kumamoto, Japan. This significant shift is largely motivated by the potential threat of severe tariffs aimed at imported chips, proposed under the Trump administration. As a safeguard against such economic measures, TSMC is making a substantial commitment to increase domestic production capabilities to fulfill US expectations and minimize potential financial impacts caused by new tariffs, rumored to be as high as 100 percent.

The original expansion plan in Japan was part of a larger initiative involving a $20 billion investment supported by $8 billion from the Japanese government. Initial phases had started with the opening of the first manufacturing plant in late 2024, with expectations to initiate the second plant's construction earlier in 2025. However, individuals familiar with TSMC's strategic realignment reported that the US developments have taken precedence, and the timeline for the second plant in Japan now remains uncertain.

TSMC Chairman C.C. Wei mentioned local congestion as a delay factor, yet this reason is perceived to mask the more pressing influence of US economic policies on TSMC's decision. In March 2025, C.C. Wei addressed this focus shift during a White House meeting, announcing the undertaking of an additional $100 billion investment within the US, complementing the previously declared commitment of $65 billion. Arizona emerges as the focal point with the establishment of three new manufacturing facilities that will produce advanced semiconductors to satisfy the requirements of major American tech companies.

Thus far, the Japanese government has not officially acknowledged any notifications validating the delay excuses provided by TSMC. This situation creates a potentially problematic dynamic for Japan, which aspires to reinforce its semiconductor industry amidst global supply chain competition. Concurrently, TSMC is advancing its European ventures, with a manufacturing site under construction in Germany, projected to be operational by 2027's end; these strategic movements underscore the dynamic demands shaping the semiconductor domain globally.

Sources: The Wall Street Journal, TechSpot

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