World’s largest chipmaker TSMC to build a second factory in Japan

New Delhi (CNN) — Chip giant Taiwan Semiconductor Manufacturing Company (TSMC) is upping its output in Japan as it continues to expand its global presence.

The world’s largest chipmaker will build a second semiconductor fabrication plant, or fab, in the country in “response to rising customer demand,” TSMC said in a statement Tuesday.

Japan Advanced Semiconductor Manufacturing (JASM), a subsidiary majority-owned by TSMC, plans to start construction by the end of 2024, it added. The facility is scheduled to be operational by the end of 2027.

Together with JASM’s first plant, which is scheduled to begin operation this year, the overall investment in Japan will exceed $20 billion “with strong support from the Japanese government,” the statement said. Toyota Motor (TM) and Sony (SONY) have also invested in the venture.

The plants will together create about 3,400 skilled jobs, according to TSMC. The increased production in Japan comes at a time when the chip maker is facing delays at its project in Arizona.

The company had announced in 2022 that it would build a second semiconductor plant in the southwestern US state, adding to plans for an existing fab and raising its overall investment in Arizona from $12 billion to $40 billion.

The investment has previously been lauded by US President Joe Biden as a sign that US manufacturing “is back.”

But earlier this year, TSMC said the facility will now be operational only in 2027 or 2028, compared to previous expectations of a 2026 start.

TSMC, based in the Taiwanese city of Hsinchu, produces an estimated 90% of the world’s super-advanced semiconductors and supplies to global tech giants such as Apple (AAPL) and Nvidia (NVDA).

It mass produces components that are vital to the running of everything from smartphones to washing machines.

The company has typically kept its most advanced manufacturing at home in Taiwan, but it has been expanding abroad in recent years due to commercial pressure and encouragement from a number of governments. Last year, it announced a factory in Dresden, Germany, its first in Europe.

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