tsmc's kumamoto plant struggles amid non-ai chip slump

2025-05-21 tsmc

Kumamoto, Wednesday, 21 May 2025.
tsmc’s kumamoto facility is facing challenges. Reports indicate low capacity utilization due to weak demand for non-ai chips. A recent survey highlights that half of japan’s new chip factories haven’t begun mass production because of sluggish demand for chips in home appliances. This situation casts a shadow over tsmc’s revenue, specifically impacting its performance in non-ai sectors. Industry observers are closely watching how tsmc navigates these market headwinds.

Capacity and production adjustments

Only three of seven semiconductor factories constructed or acquired by companies in Japan in 2023 and 2024 had begun mass production by April 2025 [2][3][4]. TSMC’s Japan Advanced Semiconductor Manufacturing (JASM) Kumamoto plant, which began production in December 2024, is among these [3][4]. Some observers suggest the plant’s capacity utilization may not be high [2][3]. Renesas Electronics has also reassessed its plans for its Kofu plant due to weak demand for power semiconductors used in electric vehicles and other devices [2][4]. Rohm, similarly, has yet to set a mass production date for a factory it acquired in 2023 [2][4].

Broader market impact

The situation in Kumamoto reflects broader trends. The global semiconductor market, excluding AI, is experiencing a slow recovery [1][7]. This impacts companies focused on memory chips and those tied to the electric vehicle market [7]. The utilization rates of semiconductor factories worldwide remain below normal [7]. Last year, the global average was between 60% and 70%, below the 80% to 90% considered standard [7]. These factors collectively contribute to uncertainty in the semiconductor industry [1].

TSMC’s strategic positioning

Despite challenges in non-ai sectors, tsmc is capitalizing on the ai boom [1][4]. Nvidia ceo Jensen Huang announced collaborations with tsmc, foxconn, and taiwan’s national science and technology council to construct taiwan’s first large-scale ai supercomputer [1]. Tsmc is increasing investments in advanced chip manufacturing to meet ai demand [6]. Ark investment management recently increased its stake in tsmc, signaling confidence in its ai prospects [1][4]. This strategic emphasis on ai could offset some of the impact from lower utilization in facilities like kumamoto [1].

Geopolitical and competitive landscape

Geopolitical factors influence the semiconductor industry [5]. Amid the us-china tech rivalry, japan is strengthening its domestic semiconductor production [5]. However, more than 50% of japan’s newly built wafer fabs have yet to begin mass production due to weak non-ai chip demand [5]. Nintendo has turned to samsung electronics for manufacturing chips for its next-generation switch 2, illustrating the competitive pressures [1]. These shifts highlight the complex interplay of market demand, geopolitical strategy, and competitive dynamics impacting tsmc’s global operations [5].

Bronnen

capacity utilization non-ai chips