Apple chipmaker TSMC reportedly considers Japan expansion as China tensions continue

Computer chip manufacturer Taiwan Semiconductor Manufacturing Co. is weighing a potential expansion in Japan as tensions between China and the West continue to create challenges for the company, The Wall Street Journal reported Wednesday.

Citing unnamed sources, the Journal reported that Japan’s government has signaled it would welcome the Apple supplier to build beyond its initial manufacturing plant in the country, though no decisions have yet been made. The factory currently under construction in Japan is meant to focus on less-advanced chips used in automobiles, for example, but additional capacity could focus on more-advanced technology, the Journal reported.

Global leaders have voiced concern about Taiwan’s continued independence from China. U.S. House Speaker Nancy Pelosi’s recent trip to Taiwan seemed to further inflame tensions, with China’s government launching military drills and halting some Taiwanese imports in response.

“The U.S.-China trade conflict and the escalation of cross-Strait tensions have brought more serious challenges to all industries, including the semiconductor industry,” TSMC Chairman Mark Liu said at an industry group event on Wednesday, according to Reuters.

The U.S. has sought to reduce its reliance on foreign chip manufacturing by passing funding to help promote domestic production facilities. Computer chips are used in a wide variety of products, from smartphones to cars to medical devices.

TSMC isn’t the only tech manufacturer shifting production to areas that may feel a less direct influence from China. Apple said some of the new iPhone 14 would be manufactured by Foxconn in India. Foxconn, which has a large presence in China, also moved some Apple product assembly to Vietnam, Reuters reported in 2020.

TSMC did not immediately respond to CNBC’s request for comment.

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