Taiwan Semiconductor Manufacturing Co Ltd (TSMC) announced plans to build new factories in the United States and Japan on Thursday, capitalizing on a pandemic-driven surge in demand for chips that power smartphones, laptops, and automobiles.

TSMC, which reported record quarterly sales and expects higher revenue in the current quarter, said it will expand production capacity in China and does not rule out a “second phase” expansion at its $12 billion Arizona factory.

The world’s largest contract chipmaker, as well as a major Apple Inc supplier, also stated that it is currently reviewing a plan to establish a specialty technology wafer fabrication plant, or fab, in Japan. TSMC’s plans for overseas expansion come amid concerns about the concentration of chipmaking capability in Taiwan, which produces the majority of the world’s most advanced chips and is geographically close to political rival China, which has not ruled out using force to seize control of the democratic island.

Taiwan and TSMC have also emerged as key players in efforts to resolve a pandemic-induced global chip shortage, which has forced automakers to cut production and harmed manufacturers of smartphones, laptops, and even appliances. “We are expanding our global manufacturing footprint to sustain and enhance our competitive advantages, as well as to better serve our customers in the new geopolitical environment,” TSMC chairman Mark Liu said during an analyst call.

“While our overseas fabs will initially be unable to match the costs of our manufacturing operations in Taiwan,” Liu explained, “we will work with governments to minimize the cost gap.”

He did not go into detail about the company’s plans in the United States and Japan, but he did say it was working to “firm up” wafer prices to reflect cost increases. Liu stated that TSMC was also planning a capacity expansion in China’s Nanjing due to “urgent demand” from clients, and that the mature 28 nanometer semiconductor manufacturing technology would be used.

It will go into production next year and will eventually reach a monthly output of 40,000 wafers by mid-2023, he said.

TSMC, Asia’s most valuable manufacturing company, increased revenue by 28% year on year to a record $13.29 billion in April-June.

TSMC expects revenue of $14.6 billion to $14.9 billion for the September quarter, up from $12.1 billion in the same period last year. According to TSMC, the auto chip shortage will gradually ease for its customers beginning this quarter, but the overall semiconductor capacity shortage is expected to last into next year.

The Taiwanese company, which also manufactures chips for Qualcomm Inc, previously announced a $100 billion expansion plan over the next three years, as fifth-generation (5G) telecommunications technology and artificial intelligence applications drive global demand for advanced chips. “As we enter the third quarter, we anticipate strong demand for our industry-leading 5 nanometer and 7 nanometer technologies, driven by all four growth platforms, which are smartphone, HPC, IoT, and automotive-related applications,” said Chief Financial Officer Wendell Huang.

Analysts are optimistic about TSMC’s business in the coming quarters, citing strong demand for the company’s most advanced 5 nanometer node technology and its upcoming 3 nanometer node, which is set to enter trial production later this year. For the second quarter, TSMC said profit increased 11 percent year on year to T$134.4 billion ($4.81 billion), falling just short of Refinitiv’s average estimate of T$136.5 billion.

TSMC, the world’s eleventh most valuable listed company, has gained about 16 percent this year, giving it a market value of $567 billion, more than double that of chipmaker Intel Corp.

The stock of TSMC closed up 0.16 percent on Thursday, compared to the benchmark index’s gain of 1.1 percent.