TSMC CEO C.C. Wei says the company won't be able to fulfill the demand led by US customers even as more capacity comes online in the US over the next few years
TSMC’s arc has swung from a 2023 downturn in non-AI chips to repeated evidence that AI demand exceeds its available output: management said so in mid-2025 and again while raising forecasts in April 2026. The latest results and higher 2026 capital-spending plan show that constraint is now shaping both near-term growth and investment decisions.
The supply issue also sits alongside a longer-running push to add US manufacturing capacity and concern that semiconductor trade is becoming less open. TSMC’s reliance on leading-edge processes—7nm and below accounted for most Q2 wafer revenue—makes its capacity decisions especially consequential.
First-order effects
US-led customers seeking TSMC capacity will continue to face allocation constraints even as US fabs come online, limiting how quickly their AI-chip plans can be supplied.
TSMC is responding by lifting its 2026 capex range and revenue outlook, concentrating the immediate benefit of sustained AI demand in its leading-edge manufacturing business.
Second-order effects
Customers and competing chip designers will have stronger incentives to secure long-term foundry capacity, while any available alternative advanced-node supply becomes more strategically valuable.
Expanded investment raises TSMC’s dependence on equipment vendors, but its reported resistance to ASML price increases indicates that demand strength will not automatically translate into unconstrained supplier pricing.
Third-order effects
If demand continues to outrun advanced-node output, access to foundry capacity—not only chip design—will remain a central competitive constraint in AI infrastructure.
The combination of persistent shortages and US capacity expansion points toward a more geographically diversified but less frictionless semiconductor supply chain, consistent with prior warnings about faltering free trade.
The trend: AI is turning advanced semiconductor fabrication capacity into a long-duration strategic bottleneck, accelerating investment while reshaping where supply is built and who can secure it.
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At today's TSMC shareholder meeting, C.C. Wei answered a question from a shareholder 🙋 “When will TSMC reach a growth plateau?” C.C. Wei replied: “I don't know when that will happen. But the next few years look very good.” And he added with a smile: “If you're planning to [image]