TSMC Races To Meet AI Demand Amid Global Semiconductor Boom
Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, is working aggressively to keep pace with surging demand driven by the artificial intelligence boom, with Chief Executive Officer C.C. Wei warning that supply constraints remain a challenge across the semiconductor industry.
Speaking at the company’s annual shareholder meeting in Hsinchu on Thursday, Wei said customer demand for AI-related chips continues to exceed available supply, placing pressure on manufacturers throughout the global technology supply chain.
“We are already working very hard,” Wei told reporters after the meeting. “Customer demand is so high, and we can only support so much.”
AI Boom Fuels Unprecedented Demand
The rapid expansion of artificial intelligence applications across consumer, enterprise and government sectors continues to drive demand for advanced semiconductor chips. As AI models become more sophisticated, they require significantly greater computing power, creating sustained demand for cutting-edge processors.
Wei noted that many suppliers and upstream vendors are also struggling to meet the pace of growth.
“We are doing our best to ensure TSMC does not become a bottleneck,” he said, adding that supply constraints are affecting multiple parts of the semiconductor ecosystem.
Taiwan occupies a central position in the global AI supply chain, supporting technology companies such as Nvidia and Apple through TSMC’s advanced manufacturing capabilities.
Balancing Demand And Pricing Strategy
During the shareholder meeting, Wei addressed questions about whether TSMC could increase prices for customers amid strong demand.
While acknowledging that higher prices may be possible, he emphasised that the company would avoid the aggressive pricing strategies adopted by some memory chip manufacturers.
“I envy their 80% gross margins, but I would never do that,” Wei told reporters.
The comments suggest TSMC remains focused on maintaining long-term customer relationships despite favourable market conditions.
Expansion Plans Face Challenges In The United States
TSMC continues to expand its manufacturing footprint globally, including a major investment programme in the United States.
The company is investing $165 billion in new facilities in Arizona, where Wei said existing land holdings should support expansion plans for at least the next decade.
However, he acknowledged challenges in shifting a significant portion of advanced production capacity overseas. TSMC’s previous goal of locating 30 per cent of its 2-nanometre-and-below manufacturing capacity in the United States is becoming increasingly difficult to achieve.
According to Wei, delays in environmental permitting and shortages of construction workers have slowed progress.
He also noted that fully meeting demand from American customers through U.S.-based production will take considerable time.
High-NA Technology Remains Under Evaluation
Wei also discussed TSMC’s work with next-generation High-NA EUV lithography systems developed by Dutch equipment manufacturer ASML.
The advanced machines, which can cost up to $400 million each, are designed to create increasingly complex semiconductor patterns on silicon wafers.
Although TSMC has already acquired High-NA tools and is conducting research and development activities, Wei said the technology is not yet economically viable for large-scale production.
“We do not currently need it for production because the cost is still somewhat high,” he said. “We will continue working to lower the cost and maximise its benefits and once the economics make sense, we will bring it into production.”
Employee Rewards Rise Alongside Profits
As AI-related revenues continue to grow, TSMC is also increasing employee compensation through profit-sharing programmes.
Wei stated that employee profit sharing rose by approximately 30 per cent from 2023 to 2024 and increased by another 30 per cent between 2024 and 2025.
He added that the company expects a similar increase in 2026.
“We believe this represents strong compensation for our employees,” Wei said, stressing that there is no fixed ceiling on profit-sharing payments.
Autonomous Vehicles And Robotics Seen As Future Growth Engines
Looking beyond the current AI boom, Wei identified autonomous vehicles and robotics as important long-term growth opportunities for the semiconductor industry.
He said TSMC intends to support the development of technologies that will enable broader adoption of intelligent machines and robotic systems.
At the same time, Wei reaffirmed Taiwan’s importance to the company’s future, highlighting the island’s concentration of engineering talent, research capabilities and manufacturing infrastructure.
“Taiwan will continue to have a very significant advantage in the AI industry,” he said. “For the foreseeable future, it will not be easy for other countries to compete.”
The comments come as global technology leaders gather in Taiwan for the annual Computex conference, where executives from major firms have repeatedly highlighted the island’s indispensable role in the global semiconductor and AI supply chains.
With inputs from Reuters