TSMC sends scouts to check whether America's datacenters can deliver

TSMC is dispatching personnel to check out US datacenter construction and power availability as it plans billions of dollars in additional chipmaking capacity. The Taiwanese chipmaking giant warned of pressure on consumer markets during its third-quarter earnings call, while maintaining that AI demand - at least for now - continues to outstrip supply. "Looking ahead, we continue to observe consumer and price-sensitive end market segments are being challenged due to the impact of rising component prices and macroeconomic uncertainties. As such, we are being prudent in our business planning going into 2027," said chairman and CEO C.C. Wei. Wei said AI demand remained strong, with CPUs for agentic workloads and networking chips adding to the need for silicon. "Therefore, semiconductors will remain essential in the AI mega trend. The value of semiconductors in the global supply chain is set to continue to increase in our view," he stated. TSMC expects capital expenditure of $60 billion to $64 billion this year. Spending across 2026-2028 is expected to exceed the total for 2023-2025 as it expands capacity for customers. Those plans depend on more than customers ordering chips: the datacenters housing them also need power, networking, memory, and other infrastructure. TSMC is checking how those pieces are coming together before committing to expanding capacity further. TSMC is planning roughly 20 leading-edge manufacturing and advanced-packaging facilities in Taiwan and overseas over the next several years, and Wei said the contract manufacturer is also focusing on capacity optimization across production nodes to generate more wafer output. One analyst on the earnings call asked whether power shortages, datacenter construction delays, advanced-packaging constraints, or limited supplies of high-bandwidth memory (HBM) could hold back projected growth. Wei said TSMC factors these constraints into its capacity planning. "We put every possibility we can, talking about the cloud service providers, capex, datacenter build-out, financial, power supply, and also other component supply, all into our consideration. "We make our own judgment, and then based on our assessment of the demand, we still think the demand is higher than the supply, and we are working very hard to narrow the gap." However, he declined to directly answer a question about whether he expected tightness in the wafer supply to be greater next year than this year, saying "the demand is extremely robust and getting higher and higher." Wei said preparations for A14, TSMC's next-generation process marketed as 1.4 nm, were underway. He expects it to become a bigger business than the current 2 nm generation. Risk production – an initial manufacturing phase ahead of commercial ramp-up – is scheduled for 2027, followed by volume production in 2028. For the third quarter ended September 30, 2026, TSMC reported revenue of $46.72 billion, an increase of 41.2 percent on the same period a year ago. Looking to the fourth quarter, the company expects another jump in revenue, to between $52.3 billion and $54.3 billion. At the midpoint, that would represent roughly 58 percent year-on-year growth. ®