NVIDIA CEO Huang: TSMC Must Work Hard to Meet AI Demand
NVIDIA CEO Jensen Huang stated that chip manufacturer TSMC may need to more than double its capacity over the next decade to meet the growing demand for artificial intelligence chips.
AI Boom Strains Chip Manufacturing
NVIDIA's Founder and CEO Jensen Huang stated at a press conference in Taiwan that the world's largest semiconductor manufacturer, Taiwan Semiconductor Manufacturing Company (TSMC), needs to 'work very hard' to meet artificial intelligence demand. Huang's remarks once again highlighted the pressure that rapid growth in AI technologies is placing on the supply chain for advanced chips, a fundamental component.
"We Need a Lot of Silicon Wafers"
According to SCMP, Huang told journalists after a dinner attended by critical supply chain partners like TSMC Chairman and CEO C.C. Wei and Foxconn Chairman Young Liu that NVIDIA's demand alone could force TSMC to more than double its capacity within the next decade. Huang said, "TSMC is doing an incredible job and working very, very hard. We have a lot of demand this year, and we need a lot of silicon wafers."
TSMC's Capacity Concerns Persist
Huang's warnings are not considered a surprise for TSMC management. Although the company expressed concerns about an AI 'bubble' in recent months, it also stated it was confident demand would continue. TSMC Chairman C.C. Wei said in a statement in November that the company's advanced manufacturing capacity was lagging behind AI demand by 'about three times' and emphasized that capacity was "Insufficient, insufficient, still insufficient." This situation indicates that the biggest obstacle to growth in the AI field may be a supply issue.
Investments and Expansion Plans
TSMC had an annual capacity of 17 million 12-inch equivalent silicon wafers in 2024, and this figure is estimated to have increased with 2025 production. The company announced a $42 billion expansion budget for 2025 alone. Furthermore, it is trying to accelerate work at new production sites, such as equipment starting to arrive next summer at the Arizona Fab 21 phase two facility and targeting mass production for 2027 instead of the originally planned 2028.
Huang also assured that Taiwan's 'silicon shield' would be protected. It was noted that recent plans to move 40% of chip production capacity from Taiwan to the US actually refer to entirely new additional capacity. The NVIDIA CEO also touched on the importance of memory chips and reshaped expectations by saying that the $100 billion deal with OpenAI was not a 'commitment' but an 'investment invitation'.
As global technology companies continue intense investments in AI infrastructure, moves like Thrive Holdings investing $100 million in AI for IT support also support this trend in the sector. How much and how quickly TSMC can increase its capacity in this competitive environment emerges as a critical factor that will shape the future of the entire technology ecosystem.
