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TSMC Says 20 New Fabs Not Enough to Meet Soaring AI Chip Demand
Electronic Technology · Semiconductors · yonhap_finance · 2026-09-03
TSMC reports that despite constructing 20 new semiconductor facilities globally, the company is struggling to keep pace with the unprecedented surge in AI demand.
What Happened
Surging AI Demand: TSMC has highlighted that the semiconductor industry is facing an unprecedented surge in demand, unseen over the past three decades. As of July, equipment procurement demand has spiked to 1.9 times the levels recorded at the end of last year, putting immense pressure on supply chains.
Global Expansion Efforts: The company is currently building approximately 20 fabs worldwide, including 13 in Taiwan and several others abroad, representing a scale four to five times larger than previous efforts. Despite this massive capital expenditure, the company admits that its production capacity remains insufficient to satisfy the explosive growth in AI-related orders.
Operational Challenges: Senior Vice President Hou Yung-ching identified a severe shortage of construction labor in both Taiwan and the U.S. as a primary bottleneck. To mitigate these issues, TSMC is integrating AI into its production lines to enhance efficiency while simultaneously strengthening measures to prevent the leakage of proprietary technologies.
Strategic Developments: The company’s Dresden facility in Germany is on track for completion by 2027, with plans to produce 480,000 12-inch wafers annually. Additionally, TSMC is establishing a testing and validation facility in Kaohsiung to support the rapid growth of advanced packaging technologies required for AI applications.