Taiwan Semiconductor Manufacturing Co. posted a sixth consecutive quarter of record profit on Thursday and guided for fourth-quarter revenue 58 percent above the year-earlier level, but the headline numbers only sharpen the industry’s real problem: the factory cannot run fast enough. Customers including Nvidia, AMD, Broadcom and a growing roster of hyperscalers designing their own accelerators are competing for a finite pool of advanced-process wafers that TSMC says topped 17 million 12-inch equivalents last year. The bottleneck now threatens to cap the infrastructure spending that underpins every aggressive AI revenue forecast.
The queue forms at Kevin Zhang’s desk
Access to TSMC’s leading-edge lines is negotiated years in advance, and many of those conversations run through Kevin Zhang, a senior vice president who D-Matrix CEO Sid Sheth calls “currently probably the most popular person on the planet.” D-Matrix brought on manufacturing vice president Jerry Qubain in 2024 in part because his TSMC relationships date to 1992, before Nvidia was founded. TSMC declined to comment for this story.
Hyperscaler spend dwarfs available slots
U.S. hyperscalers are on track for well over $700 billion in capital expenditure this year, with analysts expecting the figure to rise further in 2027. TSMC’s top ten customers already account for 78 percent of net revenue; the largest two contribute 19 percent and 17 percent respectively. That concentration leaves startups fighting for the scraps, though Sheth argues TSMC has a long-term incentive to back promising newcomers the way it once backed Nvidia and Broadcom.
New fabs arrive on geological time
TSMC is expanding aggressively, new fabs in Taiwan, Japan and Arizona, where a July announcement added $100 billion and “several more” facilities to the six already planned, lifting the Arizona commitment to $265 billion. A Texas site is also under consideration. None of that capacity arrives before the 12-to-18-month window in which Mizuho analyst Jordan Klein warns constraints could choke the industry’s current investment trajectory.