TSMC CEO says chip supply won’t meet AI demand for years

TSMC CEO C.C. Wei Expresses Confidence Amid Rising Competition, Dismisses Musk’s Chip Ambitions

TSMC CEO C.C. Wei struck a confident tone at the company’s annual shareholders’ meeting on Thursday in Hsinchu, Taiwan, saying the world’s largest contract chipmaker sees no end to the AI-driven demand powering its business — and is unafraid of mounting competition from Intel, Samsung, or Elon Musk’s ambitious Terafab project.

Wei told shareholders that TSMC’s chip supply will fall short of AI-fueled demand for years to come, even as the company ramps up manufacturing capacity in the United States and elsewhere, Bloomberg reported. He reiterated the company’s forecast for sales growth exceeding 30% this year, telling attendees that the adoption of AI models across consumer, enterprise, and sovereign applications continues to drive increased demand for advanced semiconductors.yahoo

A Pointed Message to Terafab

Wei’s sharpest remarks were directed at the Terafab initiative, Musk’s planned vertically integrated semiconductor facility announced in March. During TSMC’s first-quarter earnings call in April, Wei had already laid down a marker: “There are no shortcuts,” he said, explaining that building a modern fab takes two to three years, with another one to two years needed to ramp production. He described Intel as “a strong competitor” but added that TSMC would “never underestimate them”.taipeitimes

The Terafab project, a joint effort between SpaceX, Tesla, and Intel, filed documents in May with Grimes County, Texas, revealing an initial investment of $55 billion that could grow to as much as $119 billion across multiple phases. Morgan Stanley has estimated that initial chip production from the facility is unlikely before mid-2028 at the earliest. Musk has countered that the project exists because TSMC alone cannot meet his companies’ chip needs, saying on social media that “TSMC just can’t produce the extraordinarily high volume of chips we require”.yahoo

Dominance Amid a Shifting Landscape

TSMC’s confidence rests on firm ground. The company reported first-quarter 2026 revenue of $35.7 billion, a 35% year-over-year surge, and raised its capital expenditure budget for 2026 to between $52 billion and $56 billion. Analysts at BofA Securities have concluded that the Terafab initiative poses minimal immediate threat, citing TSMC’s technological superiority, scale advantages, and execution track record as barriers for new entrants.ocac

The shareholders’ meeting coincides with Computex, Taiwan’s flagship technology conference, where Nvidia and Intel are among major attendees. TSMC now captures over 90% of all advanced-node chip manufacturing globally, a dominance that Wei appears intent on defending — even as new challengers line up at the gate.facebook