TSMC Chairman: AI Demand 'Extremely Strong,' Adds Third 3nm Fab in Tainan
On October 15, TSMC reported its third-quarter 2026 results, with revenue reaching NT$1.49 trillion, up 50.9% year-over-year, and net profit of NT$763.06 billion, up 68.7%, both record highs. During the earnings call, Chairman and CEO C.C. Wei said AI demand remains extremely strong with no signs of slowing, and announced additional capacity expansion plans.
Wei revealed that TSMC will build an additional 3nm wafer fab in Tainan, with mass production expected in the first half of 2028. He noted that TSMC is accelerating global expansion at an unprecedented pace, with nearly 25 projects under construction, including 13 advanced process and advanced packaging fabs in Taiwan and another five to six fabs overseas. The company is also progressing smoothly with plans to add three new wafer fabs globally.
Overseas, the second fab in Arizona has completed construction and is now in equipment move-in and installation, with mass production expected in the third quarter of 2027, slightly ahead of schedule. TSMC has sent a team to evaluate a potential site in Texas and is in talks with Elon Musk's Terafab about utilizing additional capacity, though discussions remain preliminary. Wei emphasized that any fab must be operated by TSMC.
On advanced process technology, TSMC's N2 (2nm) entered high-volume production in the fourth quarter of 2025 and is currently ramping at fabs in Hsinchu and Kaohsiung. Driven by demand from smartphones, high-performance computing and AI applications, Wei expects N2-series annual capacity to more than double in 2027.
Wei said that as AI applications evolve from chatbots to AI agents, AI usage is expected to grow further, and the broad adoption of open-source AI models will also drive demand for advanced chips. AI-driven chip demand is no longer limited to GPU accelerators, with increasing CPU demand for agentic AI and strong networking chip demand.
For the fourth quarter of 2026, TSMC guided revenue of $52.3 billion to $54.3 billion, representing mid-point growth of about 14% sequentially and 58% year-over-year. Gross margin is expected at 65% to 67%. TSMC reiterated its 2026 capital expenditure budget of $60 billion to $64 billion and said capital spending from 2026 to 2028 will be significantly higher than the past three years.
