The news: TSMC, the world’s largest chipmaker, is considering building its first European semiconductor plant in Germany as well as expanding into Japan, per Nikkei Asia. While the plans are still in preliminary stages of seeking potential partners and assessing needs, they mark a shift in strategy for TSMC, which has historically concentrated the majority of its chip production in Taiwan.
Why it's worth watching: Building foundries in key countries follows a global trend to decentralize chip production from supply chains rooted in Taiwan and China.
The takeaway: Building factories in key markets helps TSMC ramp up chip production specific to those locations or aimed at local industries.
As the industry leader, TSMC can use its expertise to set up plants catering to specific markets or products faster while competitors play catch-up. This will give TSMC a first-mover advantage as countries race to build their own competing local chip fabs.