TSMC Puts Japan Fab on Hold to Focus on U.S. Chip Manufacturing Push

Taiwan Semiconductor Manufacturing Company (TSMC) is reportedly delaying the construction of its second semiconductor factory in Japan to focus on expanding its manufacturing presence in the United States. According to a report by the Wall Street Journal, the move is seen as a strategic response to potential semiconductor tariffs hinted at by U.S. President Donald Trump.

TSMC had earlier announced a $20 billion investment plan in Japan, including the opening of a second fab in Kumamoto by the end of 2027. This new facility was expected to produce over 100,000 12-inch wafers per month, serving industries such as automotive, consumer electronics, and high-performance computing. The construction was initially scheduled to begin in early 2025, but TSMC Chairman C.C. Wei cited traffic congestion as a reason for a slight delay.

However, the Japanese government has expressed surprise, saying it hasn’t received any official notice from TSMC regarding the traffic issue. Despite the construction delay, the production timeline and output targets for the second Japanese fab reportedly remain unchanged.

Meanwhile, TSMC is intensifying its investments in the U.S., following Trump’s plans to boost domestic chip production through new tariffs and incentives. A huge investment of $100 billion was pledged by TSMC in US chipmaking in March 2025 adding to its previous $65 billion in Phoenix, Arizona. The newly passed “Big Beautiful Bill” offers a 35% tax credit for chipmakers starting U.S. projects before 2027, incentivizing such shifts.

Source: Data Centre Dynamics