In the face of China-US tensions, Taiwan Semiconductor Manufacturing Company (TSMC) is contemplating expanding into Japan.
According to The Wall Street Journal, the Japanese government has indicated that it would want TSMC to expand beyond a structure already under construction. However, no decision has been made, and the company is still researching the viability of the project. The multibillion-dollar factory is being funded by the Japanese government.
The semiconductor market has been roiled since last year, when severe chip shortages hindered the automotive industry and other industries. The US and its allies, including Japan, are concerned about the Chinese semiconductor industry's expansion and the concentration of chip manufacturing on Taiwan, a sovereign island that Beijing claims as part of its territory.
TSMC is planning to build a factory in Japan that will expand its manufacturing capabilities in a country that is a close confidant of the United States. The factory will concentrate on less-advanced semiconductors commonly seen in cars as well as components such as sensors in late 2024, and it will begin shipping goods in the next year.
People who participated in the TSMC project said the government subsidies would help overcome construction difficulties in Japan, such as limited electricity supply and the possibility of earthquakes and other natural disasters. As a result of the sluggish market and rising prices, TSMC has reduced its investment plans for this year.
Foxconn, a major Chinese company, has also outsourced parts of Apple's product manufacturing.
Many businesses with manufacturing facilities in the region have suffered as a result of China's territorial disputes. It will be interesting to see how TSMC handles the move to Japan.