TL;DR: TSMC is postponing construction of its second chip plant in Japan, a decision that sources attribute to the company’s accelerated efforts to expand its operations in the United States. This shift in priorities comes as TSMC faces growing pressure to increase domestic semiconductor production in the US amid the looming threat of new tariffs on imported chips.

Individuals familiar with TSMC’s strategy told The Wall Street Journal that the company is accelerating investment in its US projects ahead of potential trade measures from the Trump administration. President Trump has called for semiconductors to be made in America and has launched an investigation that could result in tariffs of up to 100 percent on imported chips. This aggressive trade stance is prompting technology companies, including TSMC, to reassess the timing and location of their global investments.

TSMC had previously announced plans to build a second chip manufacturing facility in Kumamoto, Japan, as part of a broader $20 billion investment in the country. The Japanese government pledged more than $8 billion in support for the initiative. The company’s first plant in Kumamoto began producing chips in late 2024, and the second facility was initially slated to break ground earlier this year.

Although TSMC Chairman C.C. Wei publicly cited local traffic congestion as a reason for the delay, sources say the timeline for the second plant’s construction is now uncertain, with the company shifting its focus more heavily toward its US operations.

TSMC has not provided a new timeline for its second Japanese facility, and the delay is seen as a setback for Japan, which has been eager to bolster its domestic semiconductor industry.

Meanwhile, TSMC’s US expansion is progressing rapidly. In March, Chairman C.C. Wei visited the White House and announced plans to invest at least an additional $100 billion in the US over the next several years – on top of the $65 billion already committed. The company is building three factories in Arizona, which will be the only TSMC sites outside of Taiwan capable of producing advanced chips for major American tech firms.

The Japanese government, for its part, has stated that it has not received any formal communication from TSMC regarding traffic-related delays and believes the construction schedule for the second plant remains largely unchanged.

TSMC is also expanding in Europe, with construction underway on its first manufacturing facility in Germany, which is expected to begin production by the end of 2027. As governments in the US, Japan, and Europe compete for a greater share of the global semiconductor supply chain, TSMC’s investment decisions are being closely watched as a barometer of shifting economic and strategic priorities.