Chip giant Taiwan Semiconductor Manufacturing Co. (TSMC) is reportedly considering building advanced packaging capacity in Japan, which could spur the country's efforts to revitalize its semiconductor sector. 

Two sources familiar with the matter told Reuters that discussions are in the early stages.

Taiwan Chip Giant TSMC Looks to Expand Advanced Chip Packaging in Japan

Sources noted that TSMC is considering introducing its chip-on-wafer-on-substrate (CoWoS) packaging technology to Japan. CoWoS, renowned for its high precision, involves stacking chips vertically, enhancing processing power, conserving space, and lowering power consumption.

At present, all of TSMC's CoWoS capacity is based in Taiwan, and no definitive decisions have been made regarding the scale or timeline of a potential investment. However, it must be noted that TSMC has not yet provided an official comment on the matter.

READ NEXT: Taiwan Chip Giant TSMC to Build Second Japan Factory, With Sony and Toyota Also Investing in the Venture 

AI Boosts Chip Demand

The global demand for advanced semiconductor packaging has surged, driven by the proliferation of artificial intelligence (AI). This has prompted major chipmakers like TSMC, Samsung Electronics, and Intel to ramp up their packaging capacity.

The potential establishment of advanced packaging capacity would complement TSMC's growing presence in Japan. The company recently constructed one plant and announced another, both located in Kyushu, a prominent chip manufacturing hub. 

READ MORE: Japan to Boost Workplace Productivity with AI Amid Shrinking Workforce