TSMC resists customer push to quickly scale factory capacity for AI boom
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TSMC is holding back on rapid expansion plans, even as technology companies push for faster production to meet soaring artificial intelligence demands. TSMC, the Taiwan-based factory that manufactures nearly every high-performance AI processor, faces mounting pressure from its biggest clients. Nvidia’s chief, Jensen Huang, recently disclosed his firm needs to fulfill orders worth $500 billion over the coming two years. OpenAI has separately arranged multi-year agreements with Advanced Micro Devices for roughly 3 million to 6 million chips generating six gigawatts of power, plus another deal with Broadcom for ten gigawatts more. This rush for AI-powered processors has sparked worries about whether enough can be made. The Taiwanese manufacturer handles production for almost all premium AI chips currently available. Huang traveled to Taiwan personally, pushing the company to increase Nvidia chip output by 100%. Elon Musk has considered whether Tesla might construct its own massive semiconductor plant to support the carmaker’s AI and robotics projects. Sam Altman, who leads OpenAI, has publicly asked TSMC to “just build more capacity.” TSMC’s spending increases but not fast enough The manufacturer is responding, though not at the pace customers want. This year’s planned spending on new equipment and facilities stands at approximately $41 billion, with over two-thirds directed toward the sophisticated chips AI companies need. That represents growth from $30 billion spent last year. Industry analysts predict spending will climb to $52 billion by 2027 as reported by Economic Times. However, when measured against company income, TSMC’s infrastructure investments have actually decreased and are projected to keep falling in coming years, despite louder complaints from customers. Chip designers have limited options beyond TSMC. Intel, once a manufacturing leader, has fallen behind in producing cutting-edge processors. Samsung remains the only other serious choice, but faces its own troubles. Tesla signed a $16.5 billion agreement…
Filed under: News - @ November 15, 2025 11:24 am