TSMC struggles to meet AI demand, warns US production will take 'very long time'

Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest chipmaker, is struggling to keep up with explosive AI demand. CEO C.C. Wei told shareholders on Thursday, 'Customer demand is so high, and we can only support so much,' adding that the company is 'doing our best to ensure TSMC does not become a bottleneck.' The comments come as AI adoption surges, boosting semiconductor sales and putting pressure on the entire supply chain, including memory chips where RAM and NAND Flash shortages are expected to last years. Wei noted he'd 'like' to raise prices but ruled out abrupt increases like those seen in DRAM and SSDs.

To address US demand, TSMC has already opened a factory in Arizona and plans to invest $165 billion in three additional US plants, plus two advanced packaging facilities and an R&D center. However, Wei cautioned that fulfilling customer needs from US production could take a 'very long time.' The AI boom is projected to make semiconductors a $1 trillion industry by 2027, per Deloitte. This capacity crunch highlights the strategic importance of TSMC's global expansion, though near-term shortages may persist for AI chips used in training and inference workloads, affecting everyone from startups to hyperscalers.