Taiwan Semiconductor Manufacturing Co. is evaluating whether to shift production at its second Japanese factory to more advanced 4-nanometer chips, departing from initial plans to manufacture 6-nm and 7-nm semiconductors, Nikkei reported.
The reconsideration stems from weakening demand for older-generation chips as major customers including Nvidia Corp., Apple Inc., and Amazon.com Inc. migrate toward cutting-edge process technologies to power AI applications. Nvidia’s Blackwell processors, among the most sought-after AI chips globally, utilize TSMC’s 4-nm process.
The potential upgrade could trigger delays and require design modifications for the Kumamoto prefecture facility, which broke ground in late October and is scheduled to begin operations in 2027. TSMC is also exploring the introduction of advanced packaging technology at the site, critical for AI processor manufacturing.
The world’s largest contract chipmaker has already delayed equipment additions at its first Kumamoto plant, which started mass production in late 2024 using more mature processes for automotive and consumer electronics applications. That facility’s utilization rates have reportedly fallen below desired levels.
TSMC’s Japanese subsidiary, Japan Advanced Semiconductor Manufacturing, is backed by Sony, Denso, and Toyota, with total investment in both facilities exceeding $20 billion. No final decisions have been made regarding the technology shift.
