Taiwan Semiconductor Manufacturing Company (TSMC) is sending its own specialists to the United States to assess the progress of data center construction and electricity availability for them, reports The Register. This step comes amid a multi-billion-dollar expansion of the company's production facilities and its warnings that demand from the artificial intelligence industry still outstrips supply. Essentially, the silicon manufacturer is trying to verify independently whether the chip volumes claimed by customers will be demanded by real data centers rather than just 'paper' ones.
Reconnaissance in US data centers
Sending engineers to US construction sites and energy grids is essentially a field check of how realistic customer plans are. In June, it was reported that construction had started on only half of the data centers initially scheduled to launch by 2026. Thus, TSMC is effectively cross-checking its manufacturing commitments with the actual readiness of the infrastructure that will use these chips.
AI demand outstrips supply
During the discussion of Q3 financial results, the company warned of difficulties in consumer markets and stated that demand from the AI industry still exceeds supply. Additionally, it is affected by the need for CPUs for agentic tasks and a growing demand for networking chips. TSMC expects these difficulties to persist due to rising component costs and macroeconomic uncertainty, maintaining a cautious approach when planning business for 2027. At the same time, the company does not directly answer questions about whether the silicon wafer shortage will intensify next year.
Electricity as a bottleneck
TSMC's plans depend not only on chip orders: data centers require electricity, network infrastructure, memory, and other resources, so decisions on further production expansion are tied to the readiness of data centers to use new components. As an example, October saw a case where a major Oracle AI data center in Wisconsin was reluctant to be connected to the power grid. The company emphasizes that when planning new capacities, it takes into account potential electricity shortages, construction delays, advanced microchip packaging limitations, and memory shortages. It was also previously noted that AI development in the US largely depends on electrical equipment from China, and sanctions and tariffs only exacerbate the situation.
Capex and new capacities
TSMC's capital expenditures this year are projected to be $60–64 billion, and total expenditures for 2026–2028 will exceed 2023–2025 figures as the company ramps up production capacities in the interests of customers. In the coming years, about 20 plants are planned to be built in Taiwan and abroad for manufacturing and packaging microchips using advanced technologies. The manufacturer is also optimizing capacity utilization to produce more silicon wafers and takes into account the investment plans of cloud providers—their capital expenditures, construction schedules, and financial terms.
Financial results and the A14 process node
In Q3, TSMC's revenue reached $46.72 billion, up 41.2% year-over-year; in the current quarter, the company expects to increase it to $52.3–54.3 billion, which at the midpoint of the range will yield a growth of about 58% year-over-year. In parallel, TSMC is preparing to introduce the 1.4nm A14 process node, which is expected to be a more significant business than manufacturing based on the current 2nm generation: the initial production stage for testing before commercial launch is scheduled for 2027, and mass production for 2028.
