CC Wei, the current president and CEO of TSMC, knows exactly what he has on his hands. Recently has communicated to shareholders that this Taiwanese company will not be able to fully meet the global demand for chip production. artificial intelligence (AI). And this situation will last for several years. The trigger for this scenario is the insatiable demand for AI chips from the data centers that are being built around the planet.
Intel is setting up several cutting-edge integrated circuit production plants. Samsung, too. And TSMC is working on building new state-of-the-art factories in Taiwan, the US, Germany and Japan. Despite this effort, the future looks full of dark clouds. TSMC maintains its forecast It expects a 30% increase in sales this year, but it could sell more if its production infrastructure were able to absorb the current demand for AI semiconductors.
Despite this scenario, the head of TSMC has anticipated that his company will not take advantage of this bottleneck to suddenly increase the price of wafers. And he will not do it for a compelling reason: he prefers to guarantee the stability of his business. What will most likely happen is that the cost will rise little by little, so that it can be absorbed by the market without triggering a fracture.
If the AI bubble does not burst, demand will continue to grow
The factories that TSMC has in operation in Taiwan, and, above all, the plants that it is building in Hsinchu, Taichung and Kaohsiung, play a leading role in this company’s medium-term strategy. However, its most media project is its new facility in Arizona (USA). The plant that is already in operation has been producing 4 nm chips since 2024 in the N4 lithographic nodewhich belongs to the 5nm FinFET family.
TSMC needs to reinforce its production infrastructure in the US in an attempt to meet demand
This factory, known as Fab 21, made $514 million in profit last year according to Yeh Chun-Hsienthe minister of the National Development Council of Taiwan. This is not bad at all if we keep in mind that during the first year of operation the semiconductor plants They do not usually provide benefits. Even so, TSMC needs to reinforce its production infrastructure in the US in an attempt to meet the demand of its American customers, among which Nvidia, Apple, AMD and Qualcomm stand out.
Their plan involves investing an additional 20 billion dollars in the expansion of Fab 21. In fact, this project is part of the expansion plan of 165 billion dollars that TSMC presented last year. If everything goes as planned, mass production of 3nm integrated circuits will begin in Arizona in 2027. But this is not all. And the purpose of this company is for this site to finally bring together no less than 12 factories, 4 advanced packaging centers and an R&D facility. This is the long-term expansion plan for the Chandler (Arizona) campus.
What Wei hasn’t said, but the market has been reading between the lines for months, is that TSMC is in an extraordinarily comfortable position. You can choose who to manufacture, at what price and in what timeframe. Their clients have no real alternative in the short term. Intel tries to sneak into that gap with its 18A integration technologyand some reports argue that Apple has already reached a preliminary agreement with those of Lip-Bu Tan. But this, at best, is a story for 2027. Meanwhile, TSMC’s waiting list continues to grow. And CC Wei knows it perfectly.
Image | TSMC
More information | Tom’s Hardware
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