-- Shares of major Asian chipmaking firms sank on Monday, after a Reuters report said that Taiwan’s TSMC- the world’s largest contract chipmaker- had asked its suppliers to delay deliveries amid concerns over slowing demand. 

The report follows a warning by TSMC (TW:) (NYSE:) during its second-quarter earnings, where CEO C.C. Wei warned that a boom in artificial intelligence development was unlikely to offset a broader, cyclical slowdown in the industry. 

TSMC’s Taiwan-listed shares fell more than 3%, while South Korean memory chip makers (KS:) and (KS:) lost more than 2% each.

Shares of Semiconductor Manufacturing International Corp (HK:), China’s biggest chipmaker, fell 3% in Hong Kong trade, while peer (HK:) lost 1.6%. The two spurred an over 1% loss in the index.

Major chipmakers were reeling from a substantial decline in demand over the past year, amid surging interest rates and slowing investment in technology infrastructure. 

While a boom in AI development has fueled some chip demand this year, particularly for specialised manufacturers such as NVIDIA Corporation (NASDAQ:), most Asian players have warned that broader demand is likely to remain muted. Declining computer and mobile phone sales around the globe have furthered this notion.

TSMC had logged profit and revenue declines for the first half of the year, as did Samsung and SK Hynix. The drop in earnings also came from rampant oversupply, as a chip demand boom through 2020 and 2021 saw manufacturers ramp up their production capacity.

TSMC is struggling with delays in the development of a $40 billion facility in Arizona, which analysts warn could be a loss-making venture for the chipmaker, even if the facility comes online.

The chipmaking giant forecast a 10% decline in sales through 2023, and also expects a weaker operating margin for the third quarter. Its capital expenditure, however, has increased substantially so far this year.