TSMC CEO warns chip supply won’t meet AI-fuelled demand for years

[TAIPEI] Taiwan Semiconductor Manufacturing Company (TSMC) CEO CC Wei said that the company’s global chip supply will fall short of AI-fuelled demand for years to come, sustaining revenue growth for the firm.

Even with new manufacturing capacity in the US, TSMC cannot fulfil demand led by American customers, Wei said at the company’s annual shareholders’ meeting in Hsinchu, Taiwan, on Thursday (Jun 4). He reiterated its forecast for sales growth of more than 30 per cent for this year.

Taiwan’s largest company is an essential player in the global AI industry by making cutting-edge semiconductors for the likes of Nvidia and Advanced Micro Devices. TSMC has been expanding its footprint beyond its home island to add capacity, yet even that is not enough to satisfy chip needs as major hyperscalers are set to spend US$725 billion for AI just this year.

“It will be a long time before we can meet customer demand,” Wei said.

Shares of TSMC declined 1 per cent in Taipei after customer Broadcom provided a disappointing outlook. The stock has more than quadrupled over the past three years, fuelled by a surge in its core business.

On Thursday, Wei reiterated that TSMC staff will get more than a 30 per cent bump in their bonus payouts this year on average, addressing growing demands for the winners of the AI boom to share more of their profits.

SEE ALSO

TSMC CEO pledges over 30% incentive bump as AI profits soar

Investors look beyond TSMC as AI boom spreads to new winners

Sony, TSMC plan new Japan joint venture for next-generation image sensors

TSMC’s sales grow slowest in months even as AI buildout persists

More

Asean Intelligence

Get insights into businesses across South-east Asia

Get the free report

In April, the company raised its full-year sales guidance and said that its own capital spending should trend towards the upper end of an existing forecast range of as much as US$56 billion. BLOOMBERG