aiwan Semiconductor Manufacturing Co. and ASE Technology Holding Co. are dialing back expansion plans in Japan and Malaysia as demand for mature-node chips falters and geopolitical concerns mount.
TSMC’s first chip plant in Japan is currently operating at a utilization rate far below expectations, according to an industry executive familiar with the matter. The Kumamoto facility, which began production late last year with reportedly excellent yields, primarily serves Japanese clients including Sony Group Corp., Denso Corp. and Renesas Electronics Corp.
The world’s largest contract chipmaker has determined it won’t need equipment for 16-nanometer and 12-nanometer production in Japan until at least 2026, though construction of a second Kumamoto plant remains scheduled for this year. TSMC maintains its Kumamoto project is “progressing smoothly” and reaffirmed its commitment to supporting local customers.
Meanwhile, packaging specialists ASE and Siliconware Precision Industries Co. have paused expansion in Malaysia’s Penang state as automotive and consumer electronics demand underperforms expectations. Both companies are redirecting resources toward advanced packaging facilities in Taiwan to meet surging artificial intelligence chip requirements.
Also Intel has temporarily halted equipment installation at its Malaysia facility, which was intended to become the company’s largest advanced packaging base. The completed building now stands idle.
The pullback reflects broader concerns about tepid recovery prospects for mature chips used in consumer electronics, automotive and industrial applications. Rising tariff uncertainties under the incoming Trump administration have further complicated semiconductor investment strategies, pushing major players into a “wait-and-see” mode.
