TSMC doubles down on AI growth as CEO sees demand staying strong

Taiwan Semiconductor Manufacturing Co. expects artificial intelligence to keep driving demand for its most advanced chips over the next few years, even as rising costs and the long buildout of US production capacity create challenges for the world’s biggest contract chipmaker.

Chief Executive Officer C.C. Wei told shareholders in Hsinchu on Thursday that customers remain positive on the outlook for AI-related demand.

Wei said TSMC continues to see “increasing adoption of AI models across consumer, enterprise and sovereign AI applications.”

That trend, he said, is driving the need for greater computing power and supporting strong demand for advanced semiconductor chips.

The comments underline how central AI has become to TSMC’s growth story.

The company is a key supplier to Nvidia and other major chip designers, putting it at the heart of the global buildout of data centres, AI infrastructure and next-generation computing systems.

AI demand supports multi-year outlook

TSMC remains confident about growth over the next few years as customers continue to invest in AI applications.

The company’s most advanced manufacturing processes are used in chips that power data centres, high-performance computing and AI training and inference.

As demand for computing power rises, chip designers increasingly depend on foundries that can deliver leading-edge production at scale.

Wei’s remarks suggest that TSMC still sees strong visibility from customers, despite concerns about higher component costs and wider uncertainty across the technology supply chain.

The company raised its annual revenue forecast in April and said it was increasing capital spending this year to meet robust demand.

That has reinforced investor expectations that AI will remain the main engine of growth for the chipmaker.

US production will take time

While TSMC is expanding outside Taiwan, Wei cautioned that meeting the needs of American customers through US-based production will take a “very long time”.

He did not provide a specific timeline, but the comment highlights the scale of the challenge facing global chipmakers as governments and customers push for more geographically diversified supply chains.

The US has been trying to bring more semiconductor manufacturing onshore, partly to reduce dependence on Asia and strengthen domestic supply security.

For TSMC, however, replicating Taiwan’s advanced manufacturing ecosystem in the US is a complex and capital-intensive process.

The company must not only build fabs, but also secure equipment, trained workers, suppliers and supporting infrastructure.

That means US capacity may grow steadily, but it is unlikely to fully satisfy American demand quickly.

Wei said TSMC is working hard to meet all customer needs, while also monitoring rising component costs.

Share price rally reflects AI optimism

Wei described the past year as remarkable for the company, pointing to a sharp rise in TSMC’s share price.

The stock climbed to T$2,425 by Wednesday, up from T$950 on June 3 last year.

The rally reflects investor enthusiasm around AI demand and TSMC’s central role in the semiconductor supply chain.

The company’s performance has also translated into stronger employee rewards.

Wei said employee profit sharing increased by about 30% from 2023 to 2024, and again by about 30% from 2024 to 2025.

“We are confident it will rise by another 30% in 2026,” Wei said. “We believe this represents strong compensation for our employees.”

He added that there is “no ceiling for 30% annual growth” in employee profit sharing, saying it will continue to grow.

Autonomous vehicles and robots offer longer-term growth

Beyond AI data centres and advanced computing, Wei pointed to autonomous vehicles as a longer-term growth driver.

He also said TSMC would work hard to ensure robots can succeed, reflecting the company’s view that demand for advanced chips will broaden as AI moves into more physical and industrial applications.

Autonomous vehicles, robotics and sovereign AI projects all require powerful semiconductors.

That gives TSMC a wider set of potential growth markets beyond consumer electronics and smartphones, which historically played a larger role in chip demand.

The remarks came during the week of Computex in Taiwan, where global chip leaders have highlighted the island’s central role in technology supply chains.

Geopolitical risks remain in focus

TSMC’s growth outlook remains closely tied to Taiwan’s strategic importance in the semiconductor industry.

China has increased military pressure on Taiwan, keeping geopolitical risk in focus for investors and customers.

The island’s role in advanced chip production makes any disruption a major concern for global technology companies.

Nvidia CEO Jensen Huang has also been in Taiwan for Computex. He recently accompanied US President Donald Trump to Beijing as part of a corporate delegation.

At the event, Huang said Nvidia had enough supply to accommodate robust growth in CPUs and GPUs, though constraints remain a concern.

The post TSMC doubles down on AI growth as CEO sees demand staying strong appeared first on Invezz