{"slug": "tsmc-boosts-2026-expansion-budget-adds-100b-to-u-s-investment", "title": "TSMC Boosts 2026 Expansion Budget, Adds $100B to U.S. Investment", "summary": "TSMC raised its 2026 capital budget to as much as $64 billion and added $100 billion to its U.S. investment, driven by surging AI chip demand from customers like Nvidia and AMD. The world's largest chip foundry plans to build up to four new facilities in Arizona for 2-nm and below technologies, but warned it cannot yet meet demand, which may persist through 2029-2030.", "body_md": "TSMC is increasing its 2026 capital budget to as much as $64 billion and adding $100 billion to its existing investment in the U.S. as it chases soaring demand from AI customers.\n\nThat demand from chip designers such as Nvidia and AMD convinced TSMC on July 16 to raise its 2026 spending budget [once again this year](https://www.eetimes.com/tsmc-chases-soaring-ai-demand/) to a range between $60 billion and $64 billion. The world’s largest chip foundry pledged the additional $100 billion in the U.S., adding to a $165 billion project in the U.S. state of Arizona that’s the largest single foreign direct investment in U.S. history. The company said it will use the additional funding to build as many as four chip facilities but gave no timeframe.\n\n“This is to build several more semiconductor logic wafer fabs for 2-nm-and-below technologies, as well as advanced-packaging fabs,” TSMC CEO C.C. Wei said on a conference call to announce results for the second quarter of 2026. “We believe this investment will help to further foster the development of the U.S. semiconductor ecosystem, strengthen the supply chain, and support an increasing number of high-tech, high-paying jobs in the United States.”\n\nThe company still can’t say when it will catch up with demand.\n\n[View All](https://www.eetimes.com/category/sponsored-content/)\n\n“The gap is very big,” Wei said, declining to comment in more detail to a suggestion from Deutsche Bank Head of Technology Hardware Robert Sanders that demand for 3-nm-and-finer density chips exceeds TSMC’s supply by about 50%.\n\nTSMC’s inability to meet demand raised questions about whether competitors such as Samsung and Intel will fill the gap.\n\n“Having undersupply for a long period of time is not favorable for TSMC,” JP Morgan managing director Gokul Hariharan said on the call.\n\nTSMC declined to answer Hariharan’s question on how long the chipmaker will take to catch up with demand.\n\n“From this day all the way to 2029-2030, demand is going to be very strong,” Wei said, not ruling out the possibility of a few bumps in the road. “Whether in between there is a dip or not, I’m not very sure.”\n\nWei said he monitors customers of his customers who are building AI data centers to help manage expansion of his own capacity.\n\n**TSMC rivals**\n\nWhile TSMC struggles to close the demand gap, some believe TSMC can widen the gap with its rivals. In June, global ratings agency Standard & Poor’s raised its evaluation of the company.\n\nTSMC has growing potential to sustain its strengthened market leadership, supported by rising barriers in technology and scale, S&P said in the report. TSMC accounted for about 72% of total revenue among the top 10 foundries with sales about 8.7 times larger than its closest peer in 2025, S&P said.\n\n“We do not expect TSMC’s closest competitors in terms of technology capability, including Samsung Electronics Co. Ltd. and Intel Corp., to narrow their gap with TSMC anytime soon,” the report said. “That’s because of their weaker manufacturing ecosystems for foundry services. In addition, the lack of clients and production scale also make it difficult for competitors. It will also take time for Samsung and Intel to materially scale up their capacity.”\n\nStill, S&P believes TSMC customers, particularly for the 5-nm node and below, will aggressively look for second sources. Another factor influencing TSMC clients is [U.S. government support](https://www.eetimes.com/two-ways-of-looking-at-the-u-s-government-10-stake-in-intel/) for Intel and encouragement with major chip designers to buy from the U.S. company, S&P said.\n\nEven so, “Intel will need heavy spending and several years to build a commercially viable scale for its advanced process technology, even with sufficient capital support,” S&P said. “We therefore anticipate TSMC sustaining its very high market share in foundry services using 5 nm or more advanced process technology over the next two to three years, given its strong dedication to technological development.”\n\nSeveral analysts on the conference call asked whether [Intel’s new EMIB-T advanced packaging capacity](https://www.eetimes.com/intels-embarrassment-of-riches-advanced-packaging/) will help Intel gain customers in the wafer foundry business.\n\nTSMC welcomed Intel’s EMIB-T, saying it would provide wafer customers an alternative packaging tech that would help the overall foundry business expand.\n\n**Overexposure?**\n\nArete Research co-founder Jim Fontanelli questioned whether excessive exposure to a few large AI customers poses risks for TSMC.\n\n“As AI continues to outgrow other end markets, your exposure to customers is becoming meaningfully larger than at any point in history,” Fontanelli said.\n\nWei responded that a lot of new players are emerging in AI, which he referred to as a “new industry”. The company’s smartphone business, once its largest, declined in the second quarter this year to account for 22% of total revenue. The [shortage of memory chips](https://www.eetimes.com/ai-to-drive-surge-in-memory-prices-through-2026/) caused by AI that emerged last year has eroded sales of smartphones, Wei noted.\n\nTSMC’s high-performance computing (HPC) customers include AI chip designers such as Nvidia and AMD. TSMC’s HPC business grew by more than 20% to account for two-thirds of its overall sales.\n\n**Global expansion**\n\nWhile TSMC boosts investment in the U.S., the company will build 13 leading-edge fabs and advanced-packaging facilities in Taiwan, where most of the company’s production capacity is located in three so-called “megafabs” on the island. Arizona will be the company’s first megafab in the U.S.\n\nTSMC will build three 3-nm facilities, one each in Taiwan, the U.S., and Japan. To squeeze the most out of its existing capacity, the company is converting 5-nm facilities to 3-nm production.\n\nLooking ahead, TSMC said upcoming nodes are on track for production starts in a few years.\n\nThe company expects its new A14 node to enter production in 2027. TSMC added that A12, offering the company’s first superpower rail architecture, will enter production in 2029. Intel introduced PowerVia, its competing backside power delivery tech, with the launch of the Intel 18A process node in 2025.\n\n##### See also:\n\n**TSMC Defends Transistor Scaling Amid Huawei’s ‘Her’s Law’ Proposa****l**\n\nAt TSMC’s European Symposium, Kevin Zhang, senior VP and deputy co-COO, responded to reporters’ questions about Huawei’s proposal to stop measuring industry progress by transistor density.\n\n**TSMC Unfolds Map for Process, Packaging Tec****h**\n\nTSMC gave a peek at its chip roadmap for new process and packaging technology, including a photonics solution that promises to cut power consumption and reduce latency in AI data centers.", "url": "https://wpnews.pro/news/tsmc-boosts-2026-expansion-budget-adds-100b-to-u-s-investment", "canonical_source": "https://www.eetimes.com/tsmc-boosts-2026-expansion-budget-adds-100b-to-u-s-investment/", "published_at": "2026-07-17 05:55:59+00:00", "updated_at": "2026-07-17 06:25:21.701098+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-chips", "ai-infrastructure"], "entities": ["TSMC", "Nvidia", "AMD", "Samsung", "Intel", "C.C. 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