Taiwan Semiconductor Manufacturing Co. (TSMC) has paused construction on its second wafer fabrication plant in Kumamoto, Japan. This halt occurred just weeks after the company broke ground at the site.
TSMC stopped work to re-evaluate the facility’s planned production focus. This decision stems from changing market demands, according to reports from Nikkei Asia and the Kumamoto Nichinichi Shimbun.
The slowdown in the electric vehicle (EV) market influenced the decision. This weakened demand for the 6-7nm and 40nm automotive chips originally planned for the site. Conversely, demand for AI-related chips continues to surge.
Sources indicate TSMC now considers shifting the plant’s output to more advanced 4nm chips. This advanced production targets AI workloads, allowing the company to better capitalize on the robust data center market.