TSMC has delayed construction at its second chip fab in Japan in order to prioritize the expansion of its manufacturing base in the US.

Citing people familiar with the plans, the Wall Street Journal reported that the Taiwanese chipmaker is hoping the move will soften the impact of potential tariffs on semiconductors that Trump has been teasing since the start of his second term.

TSMC announced plans to open a second semiconductor fab in Kumamoto in February 2024 as part of its $20 billion planned investment in Japan.

At the time, the chipmaker, which opened a $7bn fab in the city that same month, said the newly announced plant was slated to be operational by the end of 2027 and would have a total production capacity of more than 100,000 12-inch wafers per month for use with automotive, industrial, consumer, and HPC-related applications.

Construction of the second facility had been expected to start in early 2025; however, in June of this year, TSMC’s chairman, C.C. Wei, said there would be a slight delay because of excessive car traffic in the region.

A further delay is now expected, although the WSJ reported that a Japanese government representative said TSMC has not directly reported the traffic issues to the government, and that it believes the second fab’s production start date and planned output remain roughly the same.

Trump has previously pledged to “return production” of computer chips and semiconductors to the United States by imposing a “100 percent tax” on their overseas production. Despite this, the President has yet to impose any semiconductor-specific tariffs.

Following Trump’s comments, in March 2025, Wei visited the White House to announce a $100bn investment in US chip manufacturing, in addition to the existing $65bn investment the company has made to build its fabs in Phoenix, Arizona.

Semiconductor manufacturers that break ground on new chip fabs in the US before the end of 2026 are now eligible for a tax credit of 35 percent under President Donald Trump’s recently passed “Big Beautiful Bill."