Taiwan Semiconductor Manufacturing Company (TSMC) announced that there is serious pressure on its production capacity due to the increasing demand for artificial intelligence technologies. The company, which is the world’s largest semiconductor manufacturer, states that it is having difficulty meeting orders from customers despite its ongoing expansion investments in the USA. In his statement after the shareholder meeting held on Thursday, the company’s CEO, CC Wei, stated that the demand has reached extremely high levels and the current capacity has certain limits.
Wei said that TSMC has put all its resources into action to avoid creating a bottleneck for its customers. The company, which plays a key role in the production of advanced processors used especially in artificial intelligence systems, is in a central position in the supply chain of NVIDIA, AMD, Apple and many large technology companies. Therefore, TSMC’s production capacity directly affects not only the company’s own performance but also the product supply in the global technology sector.
The recent proliferation of artificial intelligence applications has caused demand in the semiconductor industry to grow faster than expected. Advanced chips required for data centers, productive artificial intelligence models and high-performance computing systems have increased capacity utilization rates across the industry. In addition, a similar pressure is seen in the memory market. Industry analyzes indicate that the supply squeeze in RAM and NAND Flash memory products may continue in the coming years.
Artificial intelligence investments expand the semiconductor market
According to estimates published by Deloitte, the global semiconductor market may reach a size of $1 trillion by 2027. Hardware investments in artificial intelligence systems are cited as one of the most important factors behind this growth. In particular, the production processes required for advanced GPUs and artificial intelligence accelerators require the industry’s most advanced technology facilities. TSMC is at the center of the demand increase as one of the largest production partners in this field.
Despite this, the company takes a cautious approach to making sharp price increases in the short term. Although CC Wei stated that he might want to raise prices, he stated that a sudden increase similar to the one seen in DRAM and SSD products in recent years is not on the agenda. This statement shows that despite high demand, TSMC prioritizes maintaining long-term relationships with its customers.
On the other hand, the company continues its investments to increase its production capacity in the USA. TSMC, which has put its first factory into operation in Arizona, aims to establish three more new production facilities in the USA within the scope of a total investment plan of 165 billion dollars. In addition, two advanced packaging facilities and a research and development center are also among the plans. However, according to Wei, it may take a long time for U.S.-based production to reach a level that can meet all of customers’ needs.
The current picture in the semiconductor industry reveals that artificial intelligence-induced demand is reshaping not only the software side but also the hardware infrastructure. TSMC’s statements show that despite the acceleration of production capacity investments, global chip demand is still ahead of supply. Although the commissioning of new factories in the coming period will increase capacity, the growth rate in the artificial intelligence market is expected to push the expansion on the production side for a while longer.