US media say the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Company, is considering building a third plant in Japan to make cutting-edge chips.

TSMC's first plant in Japan is currently under construction in the southwestern prefecture of Kumamoto in a joint project with Japan's Sony Group and other partners. That facility will produce simpler chips used in vehicles and other applications. The company has already said it is mulling a second facility in Japan.

Bloomberg reported on Tuesday that TSMC is now considering constructing a third plant, which would also be in Kumamoto.

The report says the third plant could be used to produce the most advanced 3-nanometer chips, and that the investment could come to about 20 billion dollars. It says it is not yet certain when construction will begin.

Cutting-edge 3-nanometer chip technology is used for electronics such as the latest smartphones.

The Japanese government is spending big to bolster the chip industry in the country, including subsidies to both foreign and domestic companies.