TSMC Faces Challenges Meeting Rising AI Demand: “Our Capacity Has Limits”

Taiwan Semiconductor Manufacturing Co., the largest semiconductor manufacturer globally, is facing challenges in meeting the high demand from American clients, despite its ongoing factory expansion in the US. TSMC CEO C.C. Wei expressed concerns after a recent shareholder meeting, stating, “Customer demand is so high, and we can only support so much. We are doing our best to ensure TSMC does not become a bottleneck.”

The rapid growth in AI applications has already strained the memory sector, leading to a significant shortage of RAM and NAND Flash memory that is expected to persist for several years. This AI surge is also driving semiconductor sales, with projections suggesting the industry could reach a value of $1 trillion by 2027, according to research from Deloitte. While Wei mentioned a desire to increase TSMC’s prices, he clarified that the company would avoid sudden price hikes similar to those seen in the DRAM and SSD markets.

Wei also noted that it might take a “very long time” to meet customer demands through US-based production. TSMC has already established a factory in Arizona and plans to invest $165 billion in building three more plants in the US, along with two advanced packaging facilities and a research and development center.