TSMC building 20 fabs worldwide, but still can't keep up with AI chip demand

The semiconductor supply-demand imbalance triggered by the AI boom is unlikely to be resolved even as TSMC, the world's largest foundry, pushes ahead with the simultaneous construction of some 20 fabs worldwide, a senior company executive said.

Hou Yung-ching, TSMC's senior vice president and chairman of the Taiwan Semiconductor Industry Association (TSIA), made the remarks Wednesday at the Semicon Taiwan 2026 CEO Summit in Taipei, according to Taiwan media including the China Times. Hou said the semiconductor industry is facing a surge in demand unseen in the past 30 years, estimating that equipment procurement demand in July had jumped to 1.9 times the level recorded at the end of last year.

He said TSMC is currently building 13 fabs in Taiwan and has broken ground at five to six overseas locations, bringing the total number of fabs under simultaneous construction worldwide to about 20. Even so, he said production capacity still cannot keep pace with explosive demand. The current scale of construction is four to five times that of previous buildouts.

Hou said a severe shortage of construction workers poses a major obstacle to rapidly expanding fab capacity in the short term, noting that the labor crunch extends beyond Taiwan to the United States as well. He also said TSMC is actively working to integrate AI into its production lines to improve output and prevent the leakage of trade secrets.

Meanwhile, Dirk Panter, economy minister of the German state of Saxony, said at a press conference Wednesday that TSMC's Dresden factory — in which TSMC holds a 70 percent stake — is expected to be completed around 2027 and will produce 480,000 12-inch wafers annually.

He Jun, TSMC's vice president of advanced packaging technology and services, also announced at the 3DIC Global Summit Forum on Tuesday plans to build a facility on a 3-hectare site at the Baibu industrial complex in southern Kaohsiung for testing and validating semiconductor materials and equipment.