Global demand for AI chips continues to far exceed production capacity. That’s according to TSMC CEO C.C. Wei, who expects it will take years before chip manufacturers can meet customer demand. The statement underscores the immense pressure on the semiconductor industry as hyperscalers and tech companies invest heavily in AI infrastructure.
This is reported by Bloomberg. According to Wei, demand for advanced chips continues to grow faster than TSMC can add capacity. Even the expansion of production in the United States will do little to change this in the short term. American customers are among TSMC’s most important clients; the company produces chips for Nvidia, AMD, and Apple, among others.
During the company’s annual shareholders’ meeting, Wei stated that TSMC is consciously prioritizing stability. Although demand is exceptionally high, the manufacturer does not want to implement sharp price increases, as previously happened in the memory chip market. According to him, the company is focused on long-term customer relationships and predictable growth.
The warning comes at a time when major technology companies are further ramping up their investments in AI. Market analysts expect hyperscalers to collectively spend hundreds of billions of dollars this year on new data centers, AI servers, and specialized chips.
TSMC benefits directly from this. The company recently raised its revenue growth forecast for 2026 to over 30 percent. The chipmaker’s own investments are also continuing to rise. TSMC previously indicated that capital expenditures are likely to land at the upper end of the previously announced range of up to $56 billion.
Further Expansion in the U.S.
To meet growing demand, TSMC is further expanding its presence outside Taiwan. In the United States, the company is already working on six new factories. According to earlier reports, the company is also considering building four additional production sites. This would significantly increase total investments in U.S. production capacity.
Wei stated that the land parcels TSMC has acquired in Arizona offer sufficient space for expansion over the coming decade. With this, the company aims not only to create additional capacity but also to meet Washington’s goal of bringing a larger share of chip production to the U.S.
Strong demand for AI hardware is also translating into higher compensation for staff. TSMC expects to increase employee bonus payments by an average of more than 30 percent this year.
Despite the optimistic outlook, investors reacted cautiously. TSMC shares lost ground on the Taipei Stock Exchange on Thursday. This followed disappointing outlooks from Broadcom, which caused turmoil in the technology sector. In the longer term, however, the outlook remains positive: TSMC’s market value has more than quadrupled over the past three years, driven by the explosive growth of AI.