TSMC reportedly prioritizing production capacity in the US, postpones its second fab in Japan

TSMC is delaying the construction of its second semiconductor fab in Japan, as it continues to pump more funds into quickly expanding its US-based advanced packaging facilities ahead of potential US tariffs by the Trump administration.

The news is coming from the usual "people familiar with the plans", according to The Wall Street Journal, with the revised schedule from TSMC the "latest example of how President Trump's aggressive stance on trade is pulling some investments toward the US at the expense of allies".

TSMC said in early 2024 that it would be building a second semiconductor plant in southern Japan's Kumamoto prefecture, as part of a $20 billion investment plan in Japan that has brought in over $8 billion in promised support from the Japanese government.

The first semiconductor plant in Japan saw TSMC making chips for customers like Toyota last fall, with construction of the second plant meant to begin earlier this year. There were reports from Japanese media that this new plant would be delayed, but TSMC assured everyone that there were no delays. Fast-forward to June 2025, and TSMC chairman C.C. Wei said that there would be a "slight delay" because of excessive car traffic in that region of Japan (of all things).

The Wall Street Journal adds that its sources familiar with TSMC's plans said that further delays to the second Japanese semiconductor plant were "likely" and that the timing of the construction start could no longer be forecast with accuracy. The outlet adds that the delay is a "blow" to Japan, whose economy is beginning to suffer from 25% tariffs that the Trump administration placed on imported autos and steel.

A Japanese government representative said that the government hadn't heard directly from TSMC that local traffic conditions were responsible for the construction delay, and does not believe that was the reason (neither do I). Even with the delay, Japan believes that TSMC's second chip-making fab and its production start date and planned output "remain roughly the same".