HSINCHU, Taiwan, May 18, 2026, 23:01 (UTC+8)
Taiwan Semiconductor Manufacturing Co. thinks the semiconductor market could be worth over $1.5 trillion by 2030, based on presentation slides made for its technology symposium. That’s higher than its last forecast of $1 trillion.
AI’s bottleneck is shifting. The issue isn’t just processor demand anymore, but also whether manufacturers can produce enough top-end chips and package them with quick memory. TSMC put AI and high-performance computing at 55% of the chip market by 2030, leaving smartphones at 20% and autos at 10%. The chipmaker also sees AI accelerator wafer demand jumping 11 times between 2022 and 2026.
Big tech is still driving capital spending. Microsoft, Meta Platforms, Alphabet, and Amazon.com are set to spend $725 billion on capex this year, much of it for AI chips, according to the Wall Street Journal. TSMC is still the main maker for Nvidia’s top AI chips and Apple’s smartphone chips. The Journal said TSMC’s gross margin hit about 66% in the first quarter, up from around 59% a year ago, as its factories ran nearer to capacity.
TSMC Deputy Co-COO Kevin Zhang told the Hsinchu gathering that smartphones drove chip industry growth over the last ten years. “In the future, that growth momentum will come from AI,” he said. Zhang also said the fabless-foundry setup, with designers relying on manufacturers like TSMC, has sped innovation as chipmaking got more expensive and complex. Focus Taiwan – CNA English News
TSMC’s packaging plans are now at the heart of its story. Vice President Yuan Li-pen said the chipmaker’s 5.5-reticle CoWoS posted yields over 98%. CoWoS — chip-on-wafer-on-substrate — is an advanced packaging tech that puts processors and HBM together for AI systems. TSMC is looking for a 14-reticle CoWoS platform by 2028, which would connect 20 HBM stacks. A larger version is penciled in for 2029.
TSMC said its A16 process is still set for production in the back half of 2026, while five more fabs are coming this year. The company is forecasting 2-nanometer capacity to climb at a 70% compound annual pace from 2026 to 2028. TSMC also sees CoWoS and SoIC, its advanced chip stacking tech, jumping more than 80% a year through 2027.
TSMC’s roadmap is aimed at bigger AI systems, not only smaller chips. The company said its COUPE optical engine, which sends data using light instead of electrical signals, will start production in 2026. TSMC said COUPE can reduce power and latency compared to pluggable optics. CEO C.C. Wei said customers look to TSMC for “a reliable stream of new silicon technologies.” TSMC
TSMC’s latest statements arrive as rivals keep moving. Focus Taiwan reported that Intel and Samsung are showing progress in advanced packaging and foundry tech. Intel’s EMIB-T packaging yields are near 90%, Samsung’s 2-nanometer yields are in the mid-50% range. TSMC’s reported yields for now suggest it is still ahead on the high end.
TSMC shares slipped Monday, with the stock ending down 1.1% at NT$2,240 in Taipei. The Taiex dropped 0.68%. In the U.S., TSMC’s American depositary receipts lost about 2.2% to $395.47 late in the New York morning.
Market commentary has already picked up on the new forecast. An Insider Monkey piece on Yahoo Finance Sunday pointed to the Reuters report, calling TSMC one of the “fundamentally strong” stocks but noting some AI plays may deliver quicker returns. Insider Monkey
Analysts are looking past the main market outlook and watching utilization, pricing and capacity. Ben Barringer, head of technology research at Quilter Cheviot, pointed to TSMC’s April numbers and said revenue, margins and factory use looked strong. “Fabs are running hot,” he said. Reuters
Risks are in play. TSMC is putting big money into new 2-nanometer lines and adding cost with U.S. fabs while capacity is still tight, according to Wei, who also said there are “no shortcuts” in chipmaking. Margins could shift if AI orders slow, if packaging capacity slips, supply gets hit, or if Samsung and Intel make cheaper advances. Reuters
TSMC is adding more capacity outside Taiwan. Its first plant in Arizona has started production, a second is scheduled for tool move-in in the second half of 2026, and a third plant there is being built. The company’s second fab in Japan will now make 3-nanometer chips. In Germany, construction is underway on a plant for older nodes.
Execution is the focus in the near term. TSMC has the customers, the technology advantage, and controls the bottleneck. But now it needs to make the AI orders deliver profits at scale before rivals close in or customers push back on price.
