Taiwan Semiconductor Manufacturing Company (TSM) (TSMWF) is reportedly evaluating whether to use its second Japanese plant, located in Kumamoto prefecture and scheduled to begin operation in 2027, to make more advanced chips to meet demand for AI-related products.
The world’s largest chipmaker could shift to 4-nanometer production technology for advanced chips used in AI-related applications, Nikkei Asia reported. The shift could lead to design changes and delays for the plant, which began construction in October, according to three sources with knowledge of the matter.
TSMC originally intended to make 6-nm and 7-nm chips at the second plant. However, since the chipmaker announced plans for the second plant in 2024, demand for 6-nm and 7-nm chips has decreased as leading chipmakers such as Nvidia, Google, Amazon, and Apple have shifted to even more cutting-edge chips.
However, the chipmaker, while announcing the second Japanese facility, stated that its capacity plans would be subject to changes according to customer demand.
TSMC is also considering bringing its advanced chip packaging technology to Japan, which is essential for making chips for AI-computing, two sources told Nikkei. However, they highlighted that none of the plans have been finalized yet.
Nikkei Asia noted that its comparison of photos from the construction site between last month and early December found that construction on the second plant have been paused. Heavy machinery like cranes, excavators and pile drivers has been removed by the early December.
Some suppliers told Nikkei that they were informed that construction would be paused, but the chipmaker did not give any specific reason. The firm also told several suppliers that it does not need additional equipment for Japan for 2026.
TSMC has also previously changed its construction plans according to market demands, such as the redesign of its chip facilities located in Kaohsiung, Southern Taiwan, from 6-nm and 28-nm to cutting edge 2-nm technology.
“TSMC’S projects in Japan are proceeding,” the chipmaker told Nikkei Asia, adding that it is currently discussing detailed construction execution plans with its partners.