Taiwan Semiconductor Plans Four New Fabs As AI Gold Rush Continues

Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) plans to start construction on four new fabs later this year, targeting mass production of 2-nanometer chips by late 2028, according to Central Taiwan Science Park Bureau Director-General Hsu Maw-shin.

The new facilities, designated Fab 25, will house four 1.4-nanometer wafer production lines. The contract chipmaker aims to complete risk assessments by 2027 and ramp up to a monthly output of 50,000 wafers, the Taipei Times reported on Sunday.

Taiwan Semiconductor has already leased the land for the new fabs, with the Central Taiwan Science Park transferring the site last month. The park’s second-phase expansion will begin with soil and water conservation infrastructure, including detention ponds.

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Hsu projected that the park’s annual turnover will exceed 1.2 trillion New Taiwan dollars ($40.81 billion), setting a new record.

During Taiwan Semiconductor’s second-quarter earnings call, Chairman C.C. Wei disclosed that the company will allocate about 30% of its 2-nanometer and more advanced chip capacity to Arizona after completing its $165 billion U.S. investment. That investment includes six wafer fabs, two advanced packaging facilities, and a major R&D center.

Wei also said Taiwan Semiconductor plans to build 11 wafer fabs and four advanced packaging facilities globally over the next few years. The company is preparing additional 2-nanometer fabs in Hsinchu and Kaohsiung to meet growing customer demand.

Taiwan Semiconductor closed with a market value above $1 trillion in Taipei for the first time last week, driven by a sharp rise in sales forecasts fueled by soaring demand for artificial intelligence chips.

The chipmaker’s shares surged to a record high on Friday, marking a nearly 50% gain since April and making it the first Asian stock to top the $1 trillion mark since PetroChina briefly did so in 2007, Bloomberg reported on Monday. The chipmaker is a key Nvidia (NASDAQ:NVDA) and Apple (NASDAQ:AAPL) supplier.

The company raised its full-year revenue growth outlook to around 30%, signaling strong positioning amid intensifying competition for AI chip production.

Goldman Sachs analysts, including Bruce Lu, observed that demand for Taiwan Semiconductor’s advanced nodes continues to grow steadily. They anticipate the company will introduce more significant price increases in 2026 as AI-driven orders remain strong.

Price Action: TSM stock is trading higher by 0.37% to $241.29 premarket at last check Monday.

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