Taiwan Semiconductor Manufacturing Co. chief executive officer C. C. Wei blamed worsening traffic snarls for slight delays in expanding its base in southwest Japan, highlighting some of the snags in Tokyo’s signature chipmaking project.
Wei also reaffirmed TSMC’s commitment to spend another $100 billion to ramp up manufacturing in Arizona over the next half-decade. He stressed productive discussions with U.S. President Donald Trump, although Wei also said he told Trump that it will be “very, very difficult” for TSMC to complete the massive buildout in five years due to a shortage of skilled labor and the minimum required construction period.
Trump was warm in their exchange, Wei told reporters after hosting a shareholders’ meeting in Hsinchu, Taiwan, on Tuesday. “He said, ‘Do your best, that’s enough,’” Wei said.
The twin projects embody TSMC’s impetus to produce abroad as geopolitical tensions rise and demand grows for Nvidia Corp. chips essential for developing AI. TSMC has long operated mostly from its home turf of Taiwan but built a plant in Japan after securing a raft of commitments and incentives from Tokyo. It then announced plans to dramatically increase its U.S. investment days after Trump took office.
The world’s largest contract chipmaker sits at the heart of that technology supply chain, producing cutting-edge chips for Apple Inc.’s iPhones and Nvidia’s AI servers. Governments from Washington to Brussels have for years courted the company, particularly after shortages of certain types of semiconductors during the pandemic halted production of cars, smartphones, power tools, home appliances and other electronics.
TSMC’s plan to build a second factory in Kumamoto Prefecture—with construction widely expected to have started in the first quarter of this year—is key to Japan’s ambitions to regain leadership in semiconductors and attract engineers to an aging country. But the sudden influx of workers from TSMC’s first plant is already bogging down rural infrastructure, even as the chipmaker’s plans in the U.S. lowers the urgency of production in Japan.
Japanese municipalities are able to tap central government subsidies to improve roads and other infrastructure to better attract foreign factories, according to a government panel. But in a country where many people feel a strong connection to ancestral land, obtaining the property rights to widen roads can take years if not decades.
There also remain questions about the longer-term outlook for AI demand. Even before Washington slapped additional tariffs on much of the world—only to roll them back shortly after—investors had questioned whether big tech firms from Microsoft Corp. to Meta Platforms Inc. will continue to buy Nvidia chips and build data centers at the same pace.
TSMC executives have stressed that demand—particularly for high-end chips critical to developing artificial intelligence—has remained resilient. That’s helped reassure investors fearful of the Trump administration’s escalating campaign to curtail China’s tech ambitions and impose sky-high tariffs on goods around the world. For 2025, the market remains nervous about the fallout for the global economy and a sector that supplies critical components to just about every industry on the planet.
Taiwan’s largest company is also evaluating building an advanced production facility in the United Arab Emirates, Bloomberg News reported. On Tuesday, Wei said TSMC didn’t harbor plans to build a chip fab in the region.
This story was originally featured on Fortune.com
