Taiwan Semiconductor Manufacturing's (TSM) surging share price has propelled its market capitalization to the forefront globally, driven by strong market anticipation for the continued expansion of its advanced process capacity. According to a Monday report, supply chain sources indicate that TSM's 3nm monthly capacity is projected to increase from 150,000 wafers to 180,000 wafers, representing a roughly 20% rise. Meanwhile, its 2nm capacity is anticipated to reach 100,000 wafers per month by the end of 2026. Against the backdrop of explosive growth in AI computing demand, the world's largest foundry is accelerating its production expansion efforts, although supply shortages are expected to persist until 2027.
TSM's shares rose 3% on Monday to a record high, reflecting intense market focus on the supply-demand dynamics for its advanced nodes. Major AI companies are continually increasing their investments in computing power, leading to supply constraints for TSM's 2nm and 3nm production lines.
CEO C.C. Wei stated in the latest earnings conference call that the company is investing significant capital to expedite the expansion of existing fabs and build new capacity to meet relentlessly rising demand. He concurrently acknowledged that, influenced by major clients like Nvidia, AMD, and Apple consistently renewing wafer orders, the supply shortfall will extend into 2027.
The expansion of 3nm capacity is exceeding expectations, with the monthly target being revised upward to 180,000 wafers. Supply chain sources reveal that TSM's 3nm fab in Taiwan, originally slated to achieve a capacity target of 150,000 wafers per month by the end of 2026, has seen this target increased to 180,000 wafers per month, approximately 20% higher than the initial plan. This adjustment is a direct response to stronger-than-expected market demand. AI firms have recently announced密集 intensive, large-scale computing power expansion plans involving multi-year projects, creating demand for advanced-node chips spanning current and future cycles. The 3nm process, one of the most advanced currently in volume production, is a core platform for high-end AI chips and consumer processors from leading clients like Nvidia and Apple. TSM's current 3nm monthly capacity is approximately 150,000 wafers, meaning this expansion plan signifies a net addition of 30,000 wafers per month on top of the existing base.
The 2nm process entered volume production at the end of 2025 and is currently in a rapid production ramp-up phase. According to supply chain information, its monthly capacity is expected to approach 100,000 wafers before the end of 2026. Orders for TSM's two 2nm fabs have been fully booked, indicating extremely tight supply. The 2nm process represents the current cutting edge of semiconductor technology and is viewed as the critical manufacturing foundation for next-generation AI accelerator chips and high-end mobile processors. CEO Wei emphasized on the earnings call that the company is simultaneously advancing both the expansion of existing production lines and the construction of new capacity to ensure its supply capabilities keep pace with demand.
Despite TSM's all-out efforts to expand production, a fundamental alleviation of the supply crunch in the short term appears challenging. Wei clearly stated that the shortage of advanced process capacity will persist until 2027, indicating that major clients like Nvidia, AMD, and Apple will continue to face capacity constraints for a considerable period. Concurrently, the sustained tightness in TSM's capacity is creating potential opportunities for other foundry players. It has been reported that Intel's foundry business has garnered significant attention from some major clients. While Intel remains an important partner for TSM, its own foundry operations are expected to gain traction over the coming years and have hinted at the forthcoming disclosure of a significant customer roster.
Comments