TSMC's Global Expansion: Japan Delays and US Prioritization Amid AI Chip Demand

TSMC flags delays in Japan expansion while U.S. plans advance

Taiwan Semiconductor Manufacturing Company CEO C. C. Wei blamed worsening traffic snarls for delays in expanding its base in southwest Japan, even while a parallel U.S. effort races ahead. Wei reaffirmed TSMC's commitment to spend another $100 billion to ramp up manufacturing in Arizona over the next half-decade, while saying a plan to build a second plant in Japan was experiencing slight delays. He stressed productive discussions with Donald Trump earlier this year, even after telling the U.S. president it will be "very, very difficult" for TSMC to complete the massive buildout in five years due to a shortage of skilled labor. Trump was "warm" during their exchange, Wei said. The twin projects embody TSMC's impetus to produce abroad as geopolitical tensions rise and demand grows for Nvidia chips essential for developing AI. TSMC has long operated mostly from its home turf of Taiwan but built a plant in Japan after securing a raft of commitments and incentives from Tokyo. It then announced plans to dramatically increase its U.S. investment days after Trump took office.

Taiwan Semiconductor's Japan Chip Factory Faces Delays, While US Expansion Takes Priority - Taiwan Semiconductor (NYSE:TSM)

Taiwan Semiconductor Manufacturing Co TSM CEO C.C. Wei blamed traffic jams for delays in expanding its base in southwest Japan, hampering the progress of its Tokyo signature chipmaking project. Wei also reiterated their commitment to invest another $100 billion to ramp up manufacturing in Arizona over the next half-decade. However, he also highlighted to President Donald Trump the difficulties in completing the monumental construction in five years due to the skilled labor crisis, Bloomberg reported on Tuesday. Also Read: Taiwan Semiconductor Eyes UAE Gigafab, Seeks Crucial US Green Light Taiwan Semiconductor's plan to build a second factory in Japan's Kumamoto Prefecture remains vulnerable to the sudden inrush of workers from the contract chipmaker's first plant, which is taking a toll on the rural infrastructure. Interestingly, the chipmaker's prioritization of the U.S. expansion reduced the urgency of production in Japan. Prior reports indicated President Trump's tariff warning coaxed Taiwan Semiconductor to ramp up investment in the U.S. without incremental subsidies. Japan's connection to ancestral land has made it difficult to promptly improve infrastructure despite the availability of government subsidies to attract foreign factories. Concerns also remain over the longer-term outlook for AI demand. Taiwan Semiconductor's conviction over demand for chips critical to developing artificial intelligence helped reassure investors against the Trump administration's tariff policies. However, the company remains cautious about the outlook for the 2025 global economy and semiconductor industry. Reportedly, Taiwan, Japan, and the U.S. are establishing closer trilateral cooperation in the semiconductor industry, forming a "semiconductor iron triangle." The Taiwanese contract chipmaker's Arizona factory uses Japan-made manufacturing devices and materials. Japanese Minister of Economy, Trade and Industry Yasutoshi Nishimura expects collaboration in advanced chips to help the countries develop 5G, self-driving vehicles, and generative artificial intelligence. He also proposed closer Taipei-Tokyo exchanges in the energy sector. Price Action: TSM stock is up 0.52% to $195.86 at last check on Tuesday. Read Next: Taiwan Semiconductor To Build Chip Design Center In Germany: Report Photo by Jack Hong via Shutterstock TSMTaiwan Semiconductor Manufacturing Co Ltd$195.100.13%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum82.73Growth95.12QualityNot AvailableValue51.55Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs