Speaking at the company's annual shareholders' meeting in Hsinchu, Taiwan, Chief Executive Officer C.C. Wei acknowledged that demand for advanced chips remains exceptionally strong as AI adoption accelerates across industries worldwide. From consumer applications and enterprise systems to government-backed AI initiatives, companies continue to invest heavily in computing infrastructure, driving demand for cutting-edge semiconductors.
Despite aggressive expansion efforts, Wei admitted that supply remains constrained across multiple levels of the industry.
"Customer demand is so high, and we can only support so much. We are already working very hard," Wei told reporters after the meeting.
According to the CEO, the challenge extends beyond TSMC itself. Suppliers and upstream vendors throughout the semiconductor ecosystem are also struggling to keep up with the rapid pace of growth generated by the AI revolution.
"We are doing our best to ensure TSMC does not become a bottleneck," he said, adding that such constraints exist throughout the supply chain.
AI Growth Continues to Fuel Demand for Advanced Chips
The surge in AI development has transformed semiconductor manufacturers into some of the most critical players in the technology sector. TSMC sits at the center of that ecosystem, producing advanced chips used by global technology leaders such as Nvidia and Apple.
As AI models become increasingly sophisticated and computationally demanding, demand for high-performance processors continues to rise. Industry analysts view TSMC as one of the primary beneficiaries of this trend, given its dominance in advanced chip manufacturing.
However, while the company remains optimistic about future growth, executives are closely monitoring rising costs across the industry, including expenses related to manufacturing equipment, materials, and infrastructure.
Pricing Strategy Remains Cautious Despite Strong Demand
Given the overwhelming demand for its products, questions have emerged about whether TSMC could significantly increase prices for customers.
Wei acknowledged the temptation but emphasized that the company intends to maintain a balanced approach.
"I would like to do that,"
he said when asked about raising prices.
However, he quickly clarified that TSMC has no intention of implementing the kind of dramatic increases seen elsewhere in the semiconductor sector.
"I envy their 80% gross margins, but I would never do that," he told reporters.
The remarks suggest that while TSMC may continue to adjust pricing over time, the company remains cautious about imposing sudden increases that could strain relationships with key customers.
Arizona Expansion Faces Challenges
A major part of TSMC's strategy to meet future demand involves expanding manufacturing capacity outside Taiwan, particularly in the United States.
The company is investing approximately $165 billion in semiconductor facilities in Arizona, one of the largest foreign investments in U.S. manufacturing history.
Wei said the company has secured sufficient land in Arizona to support expansion plans for at least the next decade. Nevertheless, he acknowledged that increasing American production capacity remains a lengthy and complicated process.
"It will take a very long time"
to fully satisfy U.S. customer demand through domestic production, he noted.
The CEO also revealed that TSMC's earlier objective of locating 30 percent of its most advanced 2-nanometer and smaller manufacturing capacity in the United States is becoming increasingly difficult to achieve.
Among the obstacles cited were delays in environmental permitting processes and shortages of skilled construction workers, challenges that have slowed progress on several large-scale industrial projects across the country.
Advanced High-NA Technology Still Too Costly for Mass Production
During the meeting, Wei also addressed questions regarding next-generation chipmaking equipment developed by Dutch semiconductor equipment giant ASML.
The highly advanced High-NA EUV lithography machines are considered essential for producing future generations of ultra-small semiconductors. However, each machine can cost as much as $400 million, making them among the most expensive manufacturing tools ever built.
TSMC has already acquired High-NA systems and is conducting research and development activities using the technology. Yet Wei indicated that widespread deployment remains premature.
"We do not currently need it for production because the cost is still somewhat high," he said.
"We will continue working to lower the cost and maximize its benefits and once the economics make sense, we will bring it into production."
The comments highlight the delicate balance chipmakers face between technological advancement and commercial viability as manufacturing becomes increasingly expensive.
Employees Share in AI-Driven Success
As technology companies enjoy massive gains from the AI boom, attention has increasingly turned to how those profits are being shared with workers.
Addressing the issue, Wei emphasized TSMC's commitment to rewarding employees through profit-sharing programs.
"(Our) employee profit sharing increased by about 30% from 2023 to 2024 and again by about 30% from 2024 to 2025," Wei said.
"We are confident it will rise by another 30% in 2026."
He added that the company sees no upper limit on employee profit-sharing payouts.
"We believe this represents strong compensation for our employees."
"There is no ceiling."
The statement comes at a time when labor disputes and wage negotiations are becoming more prominent across the global technology sector.
Autonomous Vehicles and Robotics Seen as Next Growth Frontier
Looking beyond the current AI surge, Wei identified autonomous vehicles and robotics as major long-term opportunities for the semiconductor industry.
As self-driving technologies become more advanced and robots take on larger roles in manufacturing, logistics, healthcare, and consumer applications, demand for powerful processors is expected to expand significantly.
Wei said TSMC intends to play a central role in supporting those emerging technologies, just as it has become indispensable to the AI industry.
Taiwan's Competitive Edge Remains Strong
Despite ongoing efforts by governments around the world to build domestic semiconductor industries, Wei expressed confidence that Taiwan will remain a dominant force in advanced chip manufacturing for years to come.
The island continues to host TSMC's largest production facilities, most experienced workforce, and core research and development operations. It also remains a critical hub for the global technology supply chain.
As international technology leaders gathered in Taiwan for the annual Computex conference, Wei reinforced the country's strategic importance.
"Taiwan will continue to have a very significant advantage in the AI industry. For the foreseeable future, it will not be easy for other countries to compete," Wei told reporters.
With AI adoption accelerating worldwide and demand for advanced semiconductors showing little sign of slowing, TSMC's ability to expand capacity while maintaining technological leadership may prove crucial not only for the company but for the future of the global technology industry itself.