TSMC has raised its estimated equipment procurement needs for this year to 1.9 times the level projected at the end of last year. The company is building roughly 20 fabs simultaneously in Taiwan and overseas, yet customer demand continues to outpace available supply.
At a SEMICON Taiwan 2026 panel discussion in Taipei on Sep. 2, Hou Yong-ching, TSMC's senior vice president and co-chief operating officer, said the company had initially set its equipment procurement estimate at a baseline level of 1.0 at the end of last year. That estimate was raised to 1.5 in the first quarter of this year and then to 1.9 in July.
In other words, TSMC's estimated need for equipment purchases this year has nearly doubled in just six months.
Hou said he had never seen demand shift this sharply, or this frequently, over the past 30 years. Semiconductor capacity expansion has traditionally been based on long-term demand forecasts, with fab construction and equipment orders planned well in advance. But demand is now being revised again within a single quarter, forcing TSMC to adjust its equipment-ordering plans at the same pace.
The scale of TSMC's expansion is also unprecedented. Hou said the company is currently pursuing construction of 13 wafer fabs in Taiwan and five to six overseas. Taken together, that amounts to roughly 20 fabs under simultaneous development worldwide.
“In the past, we could only work on four or five sites at a time,” Hou said. “Now, we are expanding at four to five times that pace, and we still cannot meet demand.”
During its July 16 earnings call, TSMC said it planned to build 13 leading-edge process and advanced packaging fabs in Taiwan over the coming years. Hou's latest remarks confirm that those projects are already moving ahead—and that the number of active construction sites rises to around 20 when overseas facilities are included.
Despite the massive investment, Hou said the key constraint is no longer funding but execution at construction sites. Building a fab requires far more than completing the structure: cleanrooms, specialty-gas systems, maintenance infrastructure, and front-end process equipment must all be installed afterward.
He identified construction labor as the most immediate bottleneck. Both Taiwan and Arizona face shortages of skilled workers, and even after a fab building is completed, the lengthy process of installing and qualifying semiconductor equipment still remains.
At its July earnings call, TSMC raised its 2026 capital-expenditure forecast from US$52-56 billion to US$60-64 billion. The company also announced an additional US$100 billion investment in the United States, bringing its total planned U.S. investment to US$265 billion.
While TSMC's July message centered on expanding investment, Hou's latest comments suggest that the company is now approaching practical limits in the next phase: securing enough equipment and executing construction fast enough to turn that spending into usable manufacturing capacity.
For equipment, materials, and construction suppliers, the remarks point to the possibility of further orders. For fabless chip designers such as Nvidia and AMD, which share TSMC's manufacturing capacity, they also suggest that shortages of leading-edge process capacity and CoWoS-class advanced packaging capacity may be difficult to ease in the near term.
“The question we face today is how the entire ecosystem can absorb an increase in production demand that has nearly doubled in only six months,” Hou said. “That is the capacity challenge in front of us.”
