Taiwan Semiconductor Manufacturing Co. (TSM) has officially opened its first microchip plant in Japan as it expands beyond its home market of Taiwan.
TSMC, as the company is known, is the world’s largest manufacturer of microchips and semiconductors, with clients ranging from Nvidia (NVDA) to Apple (AAPL).
The company has been looking to diversify its operations and move away from Taiwan amid ongoing political tensions between the U.S. and China over that territory.
TSMC has been courted by Europe, the U.S., and other countries to set up local operations.
Industry analysts have said that the global semiconductor industry, and TSMC in particular, are vulnerable to a growing war over microchips between the U.S. and China.
China claims Taiwan as its sovereign territory, something that Taiwan, the U.S., and many other countries dispute.
Located in Kumamoto, TSMC’s new chip plant in Japan is equipped with a cleanroom, a sterile environment critical for chipmaking, and has 45,000 square metres of manufacturing area.
Japan is trying to strengthen its semiconductor capacity amid an intense rivalry with other chipmaking countries such as China and South Korea.
To that end, the Japanese government has invested $20 billion U.S. to attract chipmakers such as TSMC and boost the domestic industry.
TSMC’s factory in Japan will focus primarily on producing semiconductors for the automotive and industrial sectors.
In addition to Japan, TSMC is building two new microchip plants in the U.S., located in Arizona at a cost of $40 billion U.S., that is aimed at meeting America’s annual demand.
The stock of TSMC has risen 48% over the last 12 months to trade at $129.53 U.S. per share.
