Taiwan Semiconductor Manufacturing Co (ADR) (NYSE:TSM) (TSMC) is delaying the construction of its second chip plant in Japan to prioritize expanding its operations in the US, according to a Wall Street Journal report.
According to the report, sources familiar with the matter say the delay is directly linked to trade policy pressures from the Trump administration.
The US government has threatened tariffs of up to 100% on semiconductor imports in an effort to incentivize domestic production, a threat that TSMC is taking seriously as it reassesses the timeline for its overseas projects.
TSMC is now prioritizing a massive $100 billion expansion of its Arizona operations, part of a broader push to strengthen its presence in the US.
The company’s move aligns with the strategic goals of the US government, which is aggressively promoting domestic chipmaking through legislation like the CHIPS and Science Act, offering billions of dollars in subsidies to semiconductor manufacturers that establish US-based facilities.
While Japan remains an important ally and a strategic manufacturing location for TSMC, sources told the WSJ that the immediate focus is on securing US support and avoiding trade measures that could significantly raise its production costs.
TSMC has said its investment decisions are guided by a range of factors, such as customer needs, government incentives, operating efficiency, and cost structures, rather than tariffs alone.