By Wen-Yee Lee
HSINCHU, Taiwan, June 4 (Reuters) – Taiwan’s TSMC, the world’s largest contract chipmaker, is striving to keep up with demand and avoid becoming a bottleneck in the global supply chain during the relentless boom in artificial intelligence, its CEO said on Thursday.
C.C. Wei, speaking at the company’s annual shareholder meeting in the Taiwanese city of Hsinchu, said customers are still upbeat on the outlook for AI, while TSMC is monitoring the impact of rising component costs.
“Customer demand is so high, and we can only support so much. We are already working very hard,” Wei told reporters after the meeting, adding that the rapid growth of AI had left many suppliers – and upstream vendors – struggling to meet demand.
“We are doing our best to ensure TSMC does not become a bottleneck,” he said, adding that such constraints exist throughout the supply chain.
Asked during the shareholder meeting whether TSMC could raise prices for customers, Wei said he would “like to do that”, although he added the company would refrain from the abrupt price hikes that some memory firms have imposed.
“I envy their 80% gross margins, but I would never do that,” he told reporters.
TAIWAN HAS CRUCIAL ROLE IN AI SUPPLY CHAIN
TSMC continues to see increasing adoption of AI models across consumer, enterprise and sovereign applications, with that trend driving demand for greater computing power which in turn supports strong demand for advanced semiconductor chips.
Taiwan plays a crucial role in the global AI supply chain for companies including Nvidia and Apple, and its position is anchored by TSMC.
Wei said TSMC was working hard to meet all customer demands, but that it would take a “very long time” to fully satisfy American customers’ needs with production in the U.S.
TSMC is investing $165 billion to build new factories in the U.S. state of Arizona, where Wei told reporters the company’s two parcels of land there should be sufficient for the next 10 years.
Wei also said TSMC’s previous target of locating 30% of its 2-nanometer-and-below capacity in the U.S. was becoming hard to achieve, citing challenges including delays in obtaining environmental permits and a shortage of construction workers.
He said TSMC’s stock performance over the past year had been remarkable, with its share price climbing to T$2,425 by Wednesday, up from T$950 on June 3 last year.
Its shares were down more than 1% on Thursday, in line with the benchmark index.
TSMC WORKING ON REDUCING COST OF HIGH-NA TECHNOLOGY
