If you've been trying to get your hands on the latest AI chips, you know the drill: everything is backordered, prices are high, and the wait feels eternal. Taiwan Semiconductor Manufacturing Company (TSM) is trying to fix that, but it's not going to happen overnight.
The world's largest contract chipmaker just announced plans to spend nearly $56 billion this year alone to expand production capacity for its biggest customers — including Nvidia (NVDA), AMD (AMD), and Apple (AAPL). That's a lot of money, but building chip factories isn't like flipping a switch. CEO C.C. Wei noted that it takes two to three years just to construct a new fab, and another one to two years to get it up and running. So the chips hitting the market today were planned years ago.
The company is accelerating construction of new 3-nanometer fabs in Taiwan, the U.S., and Japan, with production expected to start between 2027 and 2028. It's also expanding 3-nanometer capacity for the first time, driven by demand from smartphones, AI, automotive, and IoT. And TSMC already began producing 2-nanometer chips in late 2025, keeping its lead in the most advanced nodes.
But here's the thing: even with all that spending, analysts say supply shortages are likely to persist. Handel Jones, CEO of International Business Strategies, projects that demand for chips at 2-nanometer and below could hit 400,000 to 450,000 wafers per month by 2030 — more than expected capacity. And SemiAnalysis analyst Sravan Kundojjala points to a key bottleneck: the limited supply of extreme ultraviolet (EUV) lithography tools, which are essential for making these advanced chips. He expects that constraint to last through at least 2027.
Meanwhile, TSMC isn't just building more fabs. It's also investing in advanced packaging technologies like CoPoS (Chip-on-Package-on-Substrate) to handle the complex demands of AI workloads, and it's planning to introduce its next-generation A14 node in 2028.
The Competition Is Getting Real
For years, TSMC has been the undisputed king of chip manufacturing. But rivals are catching up. Handel Jones says Samsung Electronics (SSNLF) has improved significantly and is becoming competitive in 2-nanometer technology, backed by its scale and strong memory profits. He expects Samsung to expand capacity in both the U.S. and South Korea.
Still, Kundojjala argues that TSMC still holds a multi-year yield lead and continues to gain foundry market share. He doesn't expect competitors to reclaim meaningful share before 2028. Wei acknowledged the competition but emphasized that leadership in technology, manufacturing, and customer trust remains critical as TSMC scales to meet long-term AI demand.
Technical Analysis: TSM Stock Holds Near Highs
TSM shares are trading near the upper end of their 52-week range ($161.75 to $414.50), consistent with a longer-term uptrend. The stock is 4.5% above its 20-day simple moving average (SMA) and 14% above its 100-day SMA, suggesting short-term dips are occurring within a stronger intermediate trend.
The moving average structure remains constructive, with the 20-day SMA above the 50-day SMA and a golden cross that occurred in June 2025 — a backdrop that typically aligns with trend-following demand. The next test is whether price can cleanly reclaim the $390.00 area after failing to extend past nearby resistance.
The MACD (moving average convergence divergence) is above its signal line, with a positive histogram, which still favors momentum and buyers despite today's red tape. In plain English: upside pressure has been stronger than downside pressure lately, even if the stock is pausing.
- Key Resistance: $390.00 — where recent rallies have stalled, and sellers have shown up.
- Key Support: $360.50 — an area buyers have defended when pullbacks deepen.
TSM Price Action: Taiwan Semiconductor shares were down 0.44% at $392.08 at the time of publication on Thursday. The stock is approaching its 52-week high of $414.50.
