TSMC’s Global Dominance Comes with a Price Tag

TSMC has practically reached monopoly status by producing computational chips using the latest technological processes. However, this success turns out to have a downside. According to Liberty Times, TSMC is facing a labor shortage and a sharp rise in capital expenses. The essence of the issue is that the enormous demand and market leadership compel the company to invest more money in production development, while more specialists are needed to keep up.

Recent reports indicate that TSMC plans to hire thousands of new employees to manage the increased production demand. It is reported that the Taiwanese giant’s capital expenditures will grow to $50 billion in 2026. A significant portion of the increased spending is associated with expanding production to new technological processes, such as 2 nm, and ensuring supply for core processes like 4 nm. Also noteworthy is the enormous demand for packaging technology, which presents its own set of challenges. TSMC’s rapid expansion in R&D for semiconductor processes like 3 nm and 2 nm is critical as it enhances competitiveness against companies like Samsung and Intel.

An additional problem is the fact that TSMC cannot just raise prices. Although it does increase prices, especially with the transition to new processes, apparently the price growth does not correlate with the pace of capital expenditure increases. Analysis shows that changes in capital spending and technology development directions significantly influence TSMC’s overall standing in the semiconductor industry, positioning it strongly against global competitors.