The Wrap | 31 Jan - 6 Feb 2026
A weekly digest of what mattered in Asia’s tech stack
Editor’s Note: We’re changing things around. Starting this week, the Asia Tech Lens Wrap will be more focused and more selective, highlighting a small set of moves that matter for people building, buying, or funding technology in Asia, especially in regulated and asset-heavy sectors. You’ll see fewer items and more context on why they matter. The aim is not to cover everything, but to make the week easier to interpret.
This week’s system read is clear: this wasn’t a capacity week. It was a semiconductors-as-infrastructure week. The signal across the region is that semiconductors are being treated less like a market commodity and more like a national capability. That shifts what “diversification” and “supply security” actually mean in practice. It’s no longer just about finding another supplier or negotiating better terms; it’s about where strategic capacity sits, how it’s funded and governed, and how access is shaped when markets tighten.
Japan pulls advanced-node capacity closer as TSMC plans 3nm production plan
The world’s largest contract chipmaker, TSMC has announced plans to mass-produce 3-nanometre chips in Kumamoto, southern Japan. Local media put the investment at about US$17 billion, as TSMC moves to meet surging demand for AI chips.
This should not be seen as a mere capacity update, Japan is pulling leading-edge chipmaking closer to home and treating it like strategic infrastructure. For operators, that changes the risk profile. It becomes less about negotiating price and lead times, and more about where capacity sits, who gets prioritized when supply tightens, and how quickly you can qualify. In a tighter market, access will increasingly reward buyers who can show credible demand, commit early, and move through qualification without delays.
Signals To Watch: Leading-edge capacity is increasingly allocated, not simply sold. Optionality shifts from ‘who has a supplier’ to ‘who can actually get onto the supply plan’.
Advanced packaging scales fast: ASE sees business doubling to US$3.2B in 2026
ASE Technology Holding, the world’s largest chip packaging and testing provider, says its advanced packaging business is set to double to about US$3.2 billion in 2026, driven by high-performance computing demand.
This matters because the constraint is shifting. Wafers are only part of the story. Advanced packaging is where AI-era performance gets unlocked (bandwidth, power, integration). As demand rises, packaging stops being a downstream service and becomes strategic capacity in its own right. The implication is that access won’t be won solely at the foundry level. It will be won where packaging slots, yields, and delivery windows can actually support system-level builds.
Signals To Watch: “Capacity” increasingly means foundry plus packaging. Packaging slots and yields are starting to matter as much as wafer supply.
India moves beyond fab headlines with ISM 2.0 and components funding
The recently announced Indian Union Budget includes provisions for India Semiconductor Mission (ISM) 2.0 and raises the outlay for the Electronics Components Manufacturing Scheme to ₹40,000 crore (about US$4.4 billion), widening the semiconductor push beyond fabs to the supply chain around them. The budget also includes tax relief aimed at cloud and data center infrastructure, positioning compute as part of the same industrial buildout.
The signal here is about stack depth. This is India leaning into the layers that make semiconductor capability repeatable: components, supplier maturity, packaging and test pathways, standards, and the less visible execution plumbing that reduces first-time risk. The compute incentives fit within the same frame: treating semiconductors and local compute as linked capabilities rather than separate policy lanes.
Signals To Watch: Optionality is moving from “new capacity exists” to “capacity is usable.” The real test is whether qualification, documentation, and delivery get easier at scale.
Takeaway
The old model assumed you could separate strategy from execution and still get the same outcome. That assumption is weakening as constraints show up earlier and in more places across the stack. In semiconductors, availability is becoming less a market condition and more a function of how the system chooses to allocate capacity.