NEW YORK, Feb 3, 2026, 11:11 (EST)
- TSMC shares dip in U.S. trading amid clashing concerns over supply and AI-driven demand
- Nvidia CEO warns TSMC might have to more than double its capacity within the next decade
- TrendForce highlights supply constraints in 2nm and 3nm production along with chokepoints in advanced packaging
Nvidia CEO Jensen Huang has called on Taiwan Semiconductor Manufacturing Co to boost output to keep pace with AI demand, underscoring just how constrained capacity is despite heavy investment in new chip fabs.
TSMC’s shares listed in the U.S. dropped roughly 0.7% to $339 by late morning, after fluctuating between $334.75 and $346.82 earlier in the session.
The pressure extends far beyond a single stock. TSMC, the largest contract chipmaker globally, manufactures processors designed by other companies and plays a central role in the AI hardware supply chain.
Cloud companies and chip designers continue to place strong orders, but the bottleneck is moving from design to manufacturing: the race is now about who secures the latest production lines—and who ends up waiting in line.
Late on Jan. 31 in Taipei, Huang, after hosting a so-called “trillion-dollar dinner” for tech execs, said: “TSMC needs to work very hard this year because I need a lot of wafers,” the silicon discs used to make chips. He also predicted TSMC’s capacity would rise by “much more than 100%” over the next decade. Reuters
TrendForce News reported on Feb. 2 that TSMC’s latest 2-nanometer and 3-nanometer manufacturing processes are already stretched thin as demand from high-performance computing and mobile chip sectors clashes. According to institutional investors quoted by Taiwan’s Commercial Times, TSMC aims to boost its monthly CoWoS advanced packaging capacity by over 70% year-on-year by 2026. Trendforce
Advanced packaging is the less glamorous bottleneck. This process links multiple chips into one module — a must for AI accelerators demanding massive memory bandwidth — but yields can suffer as package sizes expand.
Retail-focused stock commentary has zeroed in on the blend of scarcity and spending. In a Feb. 2 piece, The Motley Fool dubbed TSMC “vital” to the tech sector, highlighting its 72% share of the “pure foundry” market. Samsung Electronics and Intel were named as its nearest manufacturing competitors. Fool
A TokenRing AI column from Feb. 2 described TSMC’s capital budget as a “record” wager on artificial intelligence. The piece emphasized that much of the sector’s growth hinges on cutting-edge chips and specialized packaging. Chroniclejournal
A recent “bull case” piece gaining traction on finance sites argues the stock’s valuation still has upside, driven primarily by demand from AI and high-performance computing. Finviz Yahoo
TSMC has flagged a big spend ahead, projecting capital expenditure between $52 billion and $56 billion for 2026. CEO C.C. Wei warned the company must tread carefully amid AI bubble chatter. “We’re also very nervous about it,” Wei admitted. Ben Barringer from money manager Quilter Cheviot noted TSMC “ultimately benefits as the key manufacturer of all their chips.” Reuters
TSMC announced in January that its full-year 2025 revenue hit NT$3.81 trillion, marking a 31.6% jump from the previous year. The surge highlights how fast the AI-driven cycle is boosting sales. Tsmc
The downside case is straightforward. If AI server demand drops sharply, costly new capacity risks sitting idle. Meanwhile, packaging yields and overseas expansion could squeeze margins even if orders hold steady. Throw in geopolitical tensions around Taiwan and changing trade policies, and the supply picture can shift quickly.
Investors are zeroing in on upcoming hard data: updated capacity timelines for 2nm, clearer insights on packaging output, and shifts in customer ordering patterns — the kind that surface in earnings calls well ahead of chip shipment numbers.
