Taiwan Semiconductor Manufacturing Co plans to build a second chip plant in Japan to produce 5 and 10 nanometre chips starting in the second half of the decade, according to the Nikkan Kogyo newspaper on Friday.

This decision may assist Japan in reviving advanced semiconductor manufacturing, which it sees as a critical requirement for future economic growth driven by new digital technologies.

According to Nikkan Kogyo, TSMC's second plant in Japan will cost more than 1 trillion yen ($7.4 billion).

When asked about the report, TSMC referred to comments made by CEO C.C. Wei during the company's most recent quarterly earnings call in January, in which he stated that the company was considering building a second plant in Japan, and said it had nothing else to say.

The world's leading manufacturer of advanced logic chips is building its first foundry in Japan on Kyushu island, with production of 12 and 16 nanometre semiconductors set to start next year.

The Japanese government has offered TSMC a 476 billion yen subsidy, or roughly half of the factory's expected cost. Sony Group Corp and Denso Corp, both of which will use the chips it develops, are also investors.