Abstract:
TSMC is actively expanding its production capacity. It is currently building 13 wafer fabs in Taiwan and 5 to 6 wafer fabs overseas. This is an unprecedented scale. TSMC Senior Vice President Hou Yongqing pointed out at the 2026 Taiwan Semiconductor Industry Forum on Wednesday that TSMC's demand for chip manufacturing tools has almost doubled since the end of last year, and the quarterly equipment procurement estimate was raised in July to about 1.9 times the forecast in December last year, a growth rate he has not seen in 30 years.
He added that artificial intelligence is creating huge demand for production capacity, and the entire Taiwan semiconductor ecosystem must cope with rapid demand growth in just six months. This is a major challenge currently facing the industry. In the past, TSMC built four to five wafer fabs at the same time, but now the total number of wafer fabs under construction in the world is close to 20.
He also emphasized that in addition to the construction of the wafer fab itself, the entire chip ecosystem is facing severe tests. The biggest constraint is a shortage of construction workers, coupled with delivery pressure from equipment suppliers, making it difficult for the supply chain to fully keep up with demand in the short term.
Industry Picture
TSMC CEO Wei Zhejia said that TSMC will work hard to further narrow the supply and demand gap next year, but the challenge remains huge because customers like Nvidia and AMD are continuing to increase orders.
According to available data and public reports, TSMC’s actual capital expenditures for 2024 will be US$29.76 billion, and total capital expenditures in 2025 will reach US$40.9 billion, a year-on-year increase of 37%, a record high.
As demand for artificial intelligence continues to heat up, TSMC has raised its full-year capital expenditure forecast for 2026 to between US$60 billion and US$64 billion, which means that TSMC's capital expenditure will almost double within two years. This is directly related to the simultaneous construction of nearly 20 wafer fabs revealed by Hou Yongqing.
Hon Hai Chairman Liu Yangwei pointed out that the speed and scale of the artificial intelligence industry are unprecedented. All supply chain practitioners are facing tremendous pressure to expand production capacity, and inevitably worry about whether these expansion investments can recoup the costs.
He emphasized that changes in the supply chain pattern have prompted industry transformation, but the key is not decoupling, but reducing risks, that is, production lines should not be concentrated in one location. The semiconductor industry can no longer follow the traditional model of the past, and must now move towards a global cooperation model.
At the same conference, Chen Yanming, director of TSMC’s Advanced Packaging R&D Department, also explained future technologies. He pointed out that artificial intelligence systems currently face two key bottlenecks, power supply and heat dissipation management. If the system power is increased from 600 watts to 1400 watts, the power consumption will increase more than five times, which will not only reduce the power supply efficiency, but also further increase the overall heat dissipation burden.
These views also outline the current realistic picture of the semiconductor industry: while the demand side is booming, the supply side has also entered a historic expansion. However, technical limitations are becoming a key bottleneck, requiring the industry to work together.
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