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In a context where the demand for semiconductors is reaching unprecedented heights, TSMC, the Taiwanese giant in chip manufacturing, finds itself caught between a rock and a hard place. While its production lines struggle to keep up with the frantic pace of orders, its expansion projects in the United States reveal staggering and unexpected costs. A monopoly position that, paradoxically, puts the company under unprecedented pressure.
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TSMC finds itself in a delicate situation where the demand for its electronic chips far exceeds its production capacity. Order books are overflowing, fueled notably by the rise of artificial intelligence. However, this influx of orders does not always translate into profits, as the company faces logistical and technical challenges that threaten to slow down its production.
The consequences of this pressure are evident in the Hsinchu offices, where calls from major tech companies are constant. TSMC’s CEO, C.C. Wei, publicly acknowledged the company’s inability to meet all these demands, thus turning the order book into a wish list.
TSMC’s dominant position in the global market raises internal tensions and increased vigilance against potential leaks of sensitive information. A recent incident involving Intel, where a former senior executive of TSMC joined the American competitor, intensified fears of industrial espionage. The company reacted vigorously, multiplying searches and seizures of equipment to protect its manufacturing secrets.
In its quest for expansion, TSMC has undertaken the construction of factories in Arizona, a project initially seen as a strategic opportunity. However, the economic reality of this venture proves to be much more complex. The construction and operating costs in the United States, particularly for a three-nanometer production line, are exorbitant. The first factory is just beginning to be profitable, while the second, Fab 2, is already weighing heavily on the company’s finances.
The profits related to this expansion have dropped drastically between the second and third quarters of 2025, illustrating the financial challenges TSMC faces. The cost difference between Taiwan and the United States, particularly in terms of labor and materials, is painfully felt.
Founded in 1987, Taiwan Semiconductor Manufacturing Company (TSMC) has become a key player in the semiconductor field. The company was a pioneer in the pure-play foundry model, focusing exclusively on manufacturing chips for other companies without designing finished products. Over the decades, TSMC has managed to conquer the global market, establishing itself as a key supplier for tech giants such as Apple, NVIDIA, and Qualcomm. However, this dominant position comes with constant challenges, particularly in terms of information security and managing growing demand.