TSMC capacity squeeze

Taiwan Semiconductor Manufacturing Co.’s most advanced chipmaking lines are now effectively spoken for into 2027, leaving less room for new 2-nanometer and 3-nanometer orders. (seekingalpha.com) The company started volume production of its 2-nanometer process in the fourth quarter of 2025, and it says that node uses a new nanosheet transistor design to improve speed and cut power use. TSMC’s investor site says it managed more than 17 million 12-inch-equivalent wafers of annual capacity in 2025 across its network. (tsmc.com) (investor.tsmc.com) Demand has kept climbing in 2026. TSMC reported first-quarter revenue of T$1.134 trillion, or about $35.7 billion, on April 10, up 35% from a year earlier, as orders tied to artificial intelligence stayed strong. (reuters.com) (cnbc.com) A process node is the factory recipe for making the densest, fastest chips. When 2-nanometer and 3-nanometer slots are booked years ahead, companies designing processors for phones, data centers, and artificial intelligence systems have fewer places to go for the newest silicon. (tsmc.com) (seekingalpha.com) That squeeze is feeding TSMC’s pricing power. Investor coverage has tied the sold-out outlook to higher wafer prices at advanced nodes, while TSMC has already told investors it plans to spend $52 billion to $56 billion in capital expenditures in 2026 to add capacity. (seekingalpha.com) (trendforce.com) Taiwan is moving land and infrastructure to keep up. Reports from March and April said TSMC is pushing ahead with a new fab in Tainan targeted for completion in 2028, while expansion work at Central Taiwan Science Park has already handed over additional land for four more fabs. (taipeitimes.com) (taiwannews.com.tw) TrendForce reported in February that construction on additional phases of Fab 22 in Kaohsiung was already under way, with all five fabs there expected to be fully operational by the fourth quarter of 2027. The same report said a new Tainan project could begin construction as early as May 2026 if environmental review cleared in April. (trendforce.com) Rivals could still benefit if customers cannot wait. Recent coverage has pointed to Samsung Electronics as a possible alternative for some advanced-chip orders, even as TSMC remains the main manufacturing partner for companies such as Apple and Nvidia. (onmsft.com) (reuters.com) For now, the bottleneck is not demand for artificial intelligence chips but access to the factories that can make them at the newest nodes. TSMC’s next earnings call is scheduled for April 16, when investors will get a clearer read on how long that line stays full. (investor.tsmc.com)