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The world's largest contract manufacturer for chips Taiwan Semiconductor Manufacturing Company (TSMC), is reportedly set to being the production of chips based on a 3nm process next year.

According to DigiTimes, the company is not just planning for 3nm chips but will also have an enhanced version of the same in the form of N3E, which will go into production in 2023. High Volume Manufacturing (HVM) of the 3nm process node (N3) will start in the second half of next year.

N3E will feature improved manufacturing process window with better performance, power and yield.

Compared with the 5nm process, the 3nm gate-all-around (GAA) node boosts performance by 30 per cent, lowers power consumption 50 per cent and takes up 35 per cent less space.

In addition, TSMC and the Sony Group are reportedly considering joint construction of a semiconductor factory in western Japan amid a global chip shortage.

The total investment in the project is estimated at 800 billion yen ($7 billion), with the Japanese government expected to provide up to half the amount.

The factory will make semiconductors that used in-camera image sensors, as well as chips for automobiles and other products, and is slated to go into operation by 2024.

Plans for the facility, which would be TSMC's first chip production operation in Japan, come as the global tech industry grapples with unprecedented semiconductor shortages and supply chain disruptions.