Contract chip supplier Taiwan Semiconductor Manufacturing Company Ltd (TSM  ) plans to produce 6-nanometer chips at its second production facility in Japan.

The critical Apple Inc (AAPL  ) and Nvidia Corp (NVDA  ) supplier proposes to build the most advanced products at its Kumamoto site in southwestern Japan.

The facility will likely entail a total investment of 2 trillion yen ($13.3 billion), with Japan's Ministry of Economy, Trade and Industry eyeing up to 900 billion yen in subsidies, Nikkei Asia reports.

The government is putting together aid for the semiconductor sector as part of an economic stimulus package likely for finalization by the end of the month.

The support measures will include subsidies for the second TSMC plant. The ministry has requested 3.35 trillion yen for this fiscal year's supplementary budget.

Previously, Taiwan, the home to TSMC, urged cooperation and support from its allies amid the intensifying U.S.-China geopolitical tensions.

In 2022, China conducted extensive military exercises near Taiwan after U.S. diplomat Nancy Pelosi's visit to Taiwan. U.S.'s move irked China, which views Taiwan as its territory. However, Taiwan rejects Beijing's sovereignty claims.

Price Action: TSM shares traded higher by 1.40% at $93.29 on the last check Thursday.