TSMC capacity warning

Taiwan Semiconductor Manufacturing Co. says it is spending up to $56 billion this year, but it still expects tight chip supply to last into 2027 and beyond. (investor.tsmc.com) Chief executive C.C. Wei gave that warning on TSMC’s April 16 earnings call as the company raised its 2026 capital spending plan to $52 billion to $56 billion. TSMC reported first-quarter 2026 revenue of $35.9 billion and said second-quarter revenue should reach $39 billion to $40.2 billion. (investor.tsmc.com, finance.yahoo.com) A chip foundry is a factory that manufactures chips designed by other companies, and TSMC is the biggest one in that business. TrendForce said TSMC held 70.2% of global foundry revenue in the second quarter of 2025, far ahead of Samsung Foundry at 7.3%. (tsmc.com, trendforce.com) The shortage is centered on advanced chips used in artificial intelligence servers, where the bottleneck is not only the silicon wafer but also the packaging that links memory and processors at very high speed. TSMC has been expanding both leading-edge wafer capacity and CoWoS advanced packaging to serve customers building artificial intelligence accelerators. (trendforce.com, investor.tsmc.com) That leaves customers waiting on factories that take years to build, equip, and qualify before they can ship large volumes. TSMC’s second Arizona fab was completed in April, and the company now targets volume production of 3-nanometer chips there in the second half of 2027. (azcentral.com, trendforce.com) TSMC’s Arizona buildout has become a larger U.S. manufacturing project than the company first outlined in 2020. Arizona officials and local reporting say the site now includes a first fab in production, a second fab for 3-nanometer chips, and a broader expansion plan tied to federal semiconductor incentives. (abc15.com, azcentral.com) The spending surge also shows how much of the artificial intelligence supply chain still runs through one manufacturer in Taiwan. TSMC spent $40.9 billion on capital expenditures in 2025, and Electronics Weekly said the new 2026 budget would make it the largest chip-industry spender again. (electronicsweekly.com, ainvest.com) TSMC has pushed back on the idea that artificial intelligence demand is a short-lived bubble. Wei said in January that he was confident the demand was real, while analysts told EE Times the company would still struggle to add enough advanced capacity through 2026 and 2027. (datacenterdynamics.com, eetimes.com) For cloud companies, chip designers, and data-center builders, the message is that more factories are coming, but not fast enough to erase the line. TSMC is adding capacity across Taiwan, Arizona, and Japan, yet its own timeline still points to a market where advanced chips remain hard to secure well past next year. (trendforce.com, investor.tsmc.com)