As Taiwan Semiconductor Manufacturing Co.'s record quarter makes clear, demand from chipmakers shows no sign of slowing down. In fact, TSMC can't manufacture quickly enough.
The artificial intelligence boom has created unending need for space on factory lines at the world's leading chip manufacturer, and it could put a chokehold on the entire industry's ability to scale. Last year, TSMC said it had the capacity to make more than 17 million 12-inch equivalent wafers. But customers want more.
"The competition is extremely fierce," said Jordan Klein, an analyst at Mizuho Securities. "It's a game of who can get the most leverage and supply."
TSMC makes the vast majority of the world's most advanced semiconductors, the graphics processors and central processors from Nvidia, AMD and Broadcom that are necessary for running AI workloads. Now a growing number of tech firms – Apple, Google, Amazon, Microsoft, Meta and OpenAI – also rely on TSMC to make custom in-house AI accelerators.
TSMC North American CEO Sajiv Dalal told CNBC he gets at least 10 calls a day about wafer capacity. TSMC posted record profit for a sixth straight quarter on Thursday and expects fourth-quarter revenue to be 58% higher than a year earlier, driven by strong demand for its advanced chipmaking technologies.