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Owing to growing stability fears TSMC is investing in Japanese production

Until now, almost seven of the big semiconductor companies have announced to invest in Japan. Recently, TSMC declared that it will be investing in Japanese operations. In addition to this news, G7 Summit is all set to take place in the country. The G7 summit will consider the global economic conditions as well as the concerns about global trade. Most particularly, the Taiwanese economic condition will also be discussed at the summit.

Apple acquires all processes from TSMC. For this reason, the fate of Apple is deeply associated with the political and economic stability of Taiwan. Although Taiwan is an independent state with its own policies, law, elections, currency, passport, and armed forces. Yet, it is considered a part of China by the Chinese government.

China was shown by the international reaction to Russia’s invasion of Ukraine that, despite the possibility of economic risks from invading Taiwan, military risks were improbable due to the possibility of starting a nuclear war. Even in August of last year, China practiced a blockade. The short-term risk was modest, but the medium- to long-term outlook for Taiwan was not favorable, according to US military advisors at the time.

This past week, we learned that Berkshire Hathaway, the company owned by Warren Buffett, has abruptly sold all of its TSMC stock. He explicitly identified Japan as a more secure investment option and claimed that this was due to worries about the location and not the company.

TSMC is investing in Japanese operations

As per a report from Financial Times, TSMC is going to build a new plant in Japan. Besides TSMC, six other semiconductor manufacturers have decided to opt for Japan as a site for increased manufacturing of semiconductor chips. In this way, westers allies are slowly stepping out from China and reshaping the global chip supply chain.

The largest contract chip manufacturer in the world, TSMC, indicated that it may make additional investments in Japan after deciding to construct a new facility in Kumamoto, a prefecture in the country’s southwest.