Richard Saunders, Taipei
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) announced yesterday that it will allocate an unprecedented US$52 billion to US$56 billion in capital expenditure this year, aiming to expand its advanced chip production capacity to meet surging global demand for artificial intelligence (AI) applications.
The planned investment marks a sharp increase of 27 to 37 percent compared with last year’s US$40.9 billion outlay. TSMC said that 70 to 80 percent of the budget will be directed toward leading-edge technology expansion, while 10 to 20 percent will support advanced chip packaging capabilities.
Speaking at an earnings conference in Taipei, TSMC chairman and chief executive officer C.C. Wei (魏哲家) emphasized that the company’s aggressive spending strategy will extend through 2028 to ease supply bottlenecks. “We are witnessing rapid adoption of AI models across consumer, enterprise, and sovereign sectors. This is driving relentless demand for computation, which in turn fuels the need for cutting-edge silicon,” Wei said.
Wei added that strong signals from customers, including cloud service providers, reinforce the company’s confidence in the “multiyear AI mega-trend.” He noted, “I believe the AI boom is real. It has already begun to permeate our daily lives.”
To meet this demand, TSMC is expanding its manufacturing footprint in Taiwan with new 2-nanometer facilities in Hsinchu County and Kaohsiung, alongside increased packaging capacity. In the United States, the company is accelerating construction in Arizona, preparing to install new equipment this year at its second fab, which is slated to begin high-volume production of 3-nanometer chips in the latter half of 2027. A third fab is already underway, with permits being sought for a fourth, as well as the company’s first advanced packaging facility in the state.
TSMC has also secured additional land in Arizona to develop a “gigafab” cluster, underscoring its long-term commitment to U.S. expansion. Wei said the company expects supply-demand dynamics to stabilize by 2028 or 2029.
Financially, TSMC projects AI-driven demand will lift revenue by about 30 percent this year, with average annual growth of 25 percent from 2024 to 2029. First-quarter revenue is forecast to rise 4 percent sequentially, or 38 percent year-on-year, to between US$34.6 billion and US$35.8 billion. Gross margin is expected to climb to 63–65 percent, up from 62.3 percent last quarter, aided by cost improvements and higher factory utilization.
For 2025, TSMC reported record net profit of NT$1.717 trillion (US$54.35 billion), a 46.4 percent surge from NT$1.173 trillion in 2024. Earnings per share rose to NT$66.25 from NT$45.25, while gross margin improved to 59.9 percent from 56.1 percent.
