Taiwan Semiconductor Manufacturing Company (TSMC) says demand will outpace supply.

The AI boom has not only troubled professionals, as companies lay off workers to ramp up spending on AI infrastructure, but it has also triggered a massive surge in demand for chips and memory. That growing demand has contributed to higher prices for electronic devices such as laptops, smartphones, gaming consoles, and more. And if the latest comments from Taiwan Semiconductor Manufacturing Company (TSMC) are any indication, the market is unlikely to cool off anytime soon, meaning consumers could face even higher prices in the years ahead. TSMC says demand will outpace supply TSMC manufactures advanced semiconductors used by major chip designers, including Nvidia and Advanced Micro Devices (AMD). Recently, TSMC CEO CC Wei said the company's global chip supply will continue to fall short of AI-fuelled demand for years to come. The problem is even more pronounced because many technology companies depend on TSMC for manufacturing their chip. It holds around 72 per cent market share in chip manufacturing. "We continue to see increasing adoption of AI models across consumer, enterprise and sovereign AI applications," Wei said. "This trend is driving demand for greater computing power, which in turn supports strong demand for advanced semiconductor chips," he added. Higher prices may not be driven by shortages alone The pressure on chip prices may not come only from limited supply. According to Reuters, TSMC is also considering raising prices for its customers as demand for advanced semiconductors continues to surge. When asked whether TSMC could increase prices, Wei said, "I'd like to do that ... we still need to make money." At the same time, he suggested that the company would take a measured approach rather than pursuing aggressive price hikes. "We don't want to suddenly raise prices like memory companies do. That's not sustainable. TSMC is focused on long-term, sustainable operations. We're not that kind of company," Wei said. For consumers, this could mean that prices of products containing advanced chips — including smartphones, laptops, gaming consoles, and AI-powered devices — may continue to face upward pressure if chip demand keeps outpacing supply. TSMC is expanding its capacity To address the growing need for semiconductors, TSMC is also expanding its manufacturing capacity. The company is building a massive semiconductor hub in Phoenix, Arizona, with planned investments exceeding $165 billion. However, Wei says even that may not be enough. Speaking at the company's annual shareholders' meeting in Hsinchu, Taiwan, on Thursday (June 4), Wei said that even with new manufacturing capacity in the United States, TSMC cannot fully meet demand from American customers. Although TSMC has been expanding its footprint beyond Taiwan to add more capacity, demand continues to rise at a pace that is difficult to match. That demand is being driven by major hyperscalers, which are expected to spend roughly US$725 billion on AI this year alone. AI boom also brings rewards for some workers The company's strong performance is also translating into higher payouts for employees. On Thursday, Wei reiterated that TSMC staff will receive, on average, more than a 30 percent increase in bonus payouts this year. The announcement comes amid growing calls for companies benefiting from the AI boom to share more of their profits with employees. For consumers, however, the message is clear: the AI race is creating enormous demand for advanced chips, and one of the world's most important chipmakers believes supply constraints are likely to remain in place for years. - Ends

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