Summary A sharp market selloff linked to AI disruption fears has wiped out nearly US$1 trillion in software stock value within days, as investors worry that artificial intelligence is starting to replace core business models , not just hype future growth. What’s Driving the Selloff Unlike past AI pullbacks driven by valuation concerns, this rout is fuelled by real-world evidence that AI tools may soon displace entire categories of software jobs and services . The trigger was Anthropic’s launch of an AI legal tool , which reignited fears that AI could rapidly move beyond coding into legal, sales, marketing, and finance functions . Key Market Impacts Nearly US$1 trillion wiped out from software stocks tracked by an iShares ETF in just seven days Software stocks at the epicentre , but selling has spread to hardware, services, lenders, and private equity Over US$17.7bn of US tech loans now trade at distresse...
Key Takeaways
TSMC plans 3nm chip production in Japan, upgrading from earlier 7nm plans
Investment may rise to ¥2.6 trillion, strengthening Kumamoto as a chip hub
Political boost for PM Sanae Takaichi ahead of a snap election
Supports AI demand and global supply-chain diversification
Taiwan Semiconductor Manufacturing Co. is planning to produce advanced 3-nanometre chips in Japan, a significant upgrade from earlier plans and a political win for Prime Minister Sanae Takaichi as she pushes to rebuild the country’s semiconductor base.
The world’s largest contract chipmaker intends to deploy cutting-edge technology at its second wafer fabrication plant in Kumamoto, according to people familiar with the matter. That would mark a step up from the initial roadmap to manufacture 7nm chips by late 2027. To support the expansion, TSMC is expected to raise its total investment in the project to ¥2.6 trillion (US$17 billion), Japanese media reported.
The move aligns with Takaichi’s strategy to strengthen Japan’s economic security and domestic chipmaking capacity. Her government is preparing to nearly quadruple funding for advanced semiconductors and AI development to about ¥1.23 trillion in the next fiscal year.
At a meeting in Tokyo on Thursday, Takaichi described the Kumamoto project as a model for international cooperation, saying a 3nm plant would help secure both global semiconductor supply chains and Japan’s own economy. TSMC Chief Executive C.C. Wei credited strong backing from Tokyo, noting the facilities would also underpin Japan’s ambitions in artificial intelligence.
TSMC’s expansion comes as the company accelerates global capacity to meet surging demand for AI-related chips from clients such as Nvidia Corp. and Apple Inc., while facing land and power constraints in Taiwan. Analysts say geopolitical risks around Taiwan and faster-than-expected adoption of advanced nodes may have influenced the decision to upgrade plans in Japan.
Although TSMC has pledged to keep its most advanced technologies at home, it has increasingly added overseas capacity to ease domestic constraints. The company began mass production of 2nm chips in Taiwan late last year, underscoring the rapid pace of its technology roadmap.
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