TSMC expands but shortages persist

Taiwan Semiconductor Manufacturing Co. is spending at the top end of a record $52 billion to $56 billion 2026 budget, and Chief Executive C.C. Wei says supply will still stay tight. (thestar.com.my) TSMC raised its 2026 revenue growth forecast to more than 30% in U.S. dollar terms on April 16 after first-quarter profit jumped 58% to T$572.5 billion, or about $18.2 billion. Wei told analysts that AI demand remains “extremely robust,” while capital spending will land at the high end of the company’s earlier range. (thestar.com.my) A chip shortage here does not just mean not enough wafers. It also means not enough packaging — the step that stacks and connects chips after they are made — plus tight supply for high-bandwidth memory, the fast memory used beside AI processors. (trendforce.com) (investing.com) That is why a bigger fab budget does not quickly clear the backlog. Wei said production capacity remains very tight, and Reuters reported TSMC is expanding 3-nanometer output in Taiwan, the United States and Japan for heavier volume in 2027 and 2028. (thestar.com.my) TSMC’s Arizona build-out shows the timeline problem. The first Phoenix fab started high-volume N4 production in the fourth quarter of 2024, the second fab targets N3 volume production in the second half of 2027, and the third fab for N2 and A16 is aimed for the end of the decade. (tsmc.com) The company now says its Arizona plan has grown from $12 billion to $165 billion and includes six wafer fabs, two advanced packaging facilities and an research-and-development center. That gives customers more geographic spread, but not immediate relief for 2026 orders. (tsmc.com) Competition is shifting underneath that expansion. Qualcomm is reported to be discussing Samsung’s 2-nanometer SF2 process for a future Snapdragon 8 Elite Gen 6 chip, partly to reduce reliance on TSMC as wafer prices rise. (sammobile.com) But the Samsung picture is unsettled. TrendForce, citing Korean reports, said Samsung’s 2-nanometer yields are in the mid-50% range, below the roughly 60% level commonly seen as needed for stable mass production, while TSMC is reportedly in a 60% to 70% range. (trendforce.com) Goldman Sachs has already tied TSMC’s spending surge to Taiwan’s packaging supply chain, upgrading local equipment names on expectations that backend demand will keep rising with the fab build-out. The market reaction fits a broader reality: more money is going into the system, but the narrowest chokepoints are moving downstream. (investing.com) For customers buying AI chips, the message from April’s earnings call was simple and specific: even TSMC’s largest-ever build cycle is arriving on semiconductor time, measured in years, while demand is arriving now. (thestar.com.my) (tsmc.com)