TSMC Struggles to Meet US Customer Demand Amid AI Boom
Quick Look
- TSMC, the world's largest chipmaker, is facing challenges meeting demand from American customers, even with its US factory expansion.
- Wei cited high customer demand and the AI boom as key factors, noting that US-based production will take time to scale.
AI-generated summary
Why It Matters
TSMC is the world's largest semiconductor manufacturer. The surge in AI use has increased demand for semiconductors and memory products. TSMC is expanding its manufacturing presence in the US.
Taiwan Semiconductor Manufacturing Co. — the world’s biggest semiconductor-maker — is struggling to meet demands from American customers even with its factory buildout in the US, according to reports from Reuters and Bloomberg.
“Customer demand is so high, and we can only support so much,” TSMC CEO C.C. Wei said after a shareholder meeting on Thursday, Reuters reports. “We are doing our best to ensure TSMC does not become a bottleneck.”
The surge in AI use has already put constraints on the memory industry, with the widespread shortage of RAM and NAND Flash memory expected to last for years. The AI boom is boosting the sale of semiconductors as well, which could become a $1 trillion industry by 2027, according to research from Deloitte.
While Wei said he’d “like” to raise TSMC’s prices, the company wouldn’t issue an abrupt increase like we’ve seen with DRAM and SSDs, as reported by Reuters.
Wei added it could take a “very long time” to fulfill its customers’ needs with US-based production, according to Reuters. TSMC has already opened a factory in Arizona and plans to invest $165 billion to build three additional plants in the US, alongside two advanced packaging facilities and a research and development center.
What to Watch
AI outlook — possibilities, not facts
Shortage of RAM and NAND Flash memory is expected to last for years.
Very likely · Within years
Semiconductor industry could become a $1 trillion industry by 2027.
Likely · Medium term
Open Questions
- When will TSMC's US factories be able to fully meet customer demand?
- What specific price increases, if any, will TSMC implement?
- How will the memory shortage impact other technology sectors?
- What is the projected timeline for TSMC's additional US plant construction?
