Update
TSMC Maintains Capital Expenditure Plan at $60B-$64B Amid AI Demand
Taiwan Semiconductor Manufacturing Company (TSMC) has maintained its capital expenditure (capex) plan at $60 billion to $64 billion for the year. This comes as the company upgrades its revenue growth forecast to approximately 44% in US dollar terms, up from a previous forecast of around 40%. The capex plan is driven by strong artificial intelligence (AI) demand, which exceeds supply in the semiconductor market. The company expects capex to significantly exceed the total spent from 2023 to 2025. However, the expansion is expected to dilute gross margins by about 2 percentage points in 2026, affecting shareholder returns. Key items to track include whether TSMC can maintain its revenue growth forecast and manage the margin dilution as more overseas facilities come online or mature.