TSMC Says Demand for AI Chips Is ‘Insatiable’ as October Sales Hit a Record $17.9 Billion

November 11, 2026 Faizan Altaf

The company that makes the world’s most advanced computer chips says it cannot make them fast enough. Taiwan Semiconductor Manufacturing Co. (TSMC) has described demand for its artificial intelligence (AI) chips as “insatiable”, and its latest sales figures back that up: October revenue hit a record high of about NT$586.89 billion (around US$17.9 billion), up almost 60 percent on a year earlier.

TSMC is the world’s largest contract chipmaker. It does not design chips itself. Instead, it manufactures them for companies such as Nvidia, AMD and Apple — the firms whose processors power everything from smartphones and laptops to the giant data centres that train AI systems such as ChatGPT and Claude. When TSMC says demand is outrunning supply, the whole technology industry feels it.

The warning matters far beyond Taiwan. Chips are now the raw material of the modern economy, as important as oil was in the last century. A shortage of advanced chips pushes up the price of phones, computers and cloud computing, and it slows down the companies racing to build AI. TSMC’s latest numbers and its own words suggest that shortage is not ending any time soon.

“Insatiable” demand, in TSMC’s own words

Speaking at the Nikkei Forum Global Management Dialogue 2026 in Tokyo on Wednesday, 11 November, TSMC senior vice president Kevin Zhang was blunt about the state of the market.

“The demand on our leading node [most advanced] silicon is insatiable,” Zhang said, according to Nikkei Asia. He added that customers keep telling the company that “the biggest commodity today is [the capacity to] compute when it comes to AI.”

In plain terms: the world’s biggest technology companies are not arguing about whether they need more computing power. They are arguing about who gets it first — and TSMC is the factory that makes most of it.

Zhang also said customers are continuing to move to TSMC’s most advanced manufacturing processes, shifting from 5-nanometre chips to its newest 2-nanometre chips. A nanometre is one-billionth of a metre, and the smaller the number, the more transistors can be packed onto a chip — which means more power in less space. The move to 2nm is one of the main reasons TSMC’s sales are climbing so fast.

It is not the first time TSMC’s leadership has used such language. At the company’s third-quarter earnings call last month, chairman and chief executive C.C. Wei said that “AI demand is extremely strong” and that “even considering all variables, demand still significantly exceeds our current supply capacity.” In other words, TSMC is selling everything it can make — and it still is not enough.

A record month: the numbers behind the boom

TSMC reported its October revenue on Tuesday, 10 November, and the figures were striking:

October revenue: NT$586.89 billion (about US$17.9 billion), a record for a single month.
Year on year: up 59.7 percent from October 2025.
Month on month: up 14.7 percent from September 2026.
Previous record: NT$514.81 billion, set just two months earlier, in August.
January to October 2026: cumulative revenue of NT$4,485.6 billion, up 43.3 percent from the same period last year.

The company also reported a record third quarter. Reuters reported that TSMC posted net profit of about NT$763.1 billion (roughly US$23.5 billion) for the three months to the end of September, on revenue of about NT$1.49 trillion. It was the company’s sixth consecutive record quarterly profit.

Investors reacted quickly. TSMC’s shares closed 2.24 percent higher on the Taiwan Stock Exchange on 10 November, and the company has raised its full-year 2026 revenue growth forecast to about 44 percent in US dollar terms.

To put the scale in perspective: TSMC now earns in a single month roughly what many large companies earn in a year. And the growth is not a one-off spike — October was the second monthly record in three months, and sales for the first ten months of the year are more than 40 percent higher than the same period in 2025.

Why everyone wants TSMC’s chips

The AI boom runs on a simple chain. Companies such as OpenAI, Google, Microsoft and Meta want to build bigger and smarter AI systems. Those systems need huge amounts of computing power. That computing power comes from specialised chips called AI accelerators, mostly designed by Nvidia and AMD. And almost all of those advanced chips are manufactured by TSMC.

Three forces are driving demand higher at the same time:

1. AI data centres are being built at record speed. Technology giants are spending hundreds of billions of dollars on data centres packed with AI chips. Every new data centre means more orders for TSMC.

2. The newest chips are more expensive — and more profitable. Chips made on TSMC’s most advanced processes, 5 nanometres and below, accounted for 69 percent of the company’s revenue in the third quarter. The expansion of mass production on the 2-nanometre process is now adding to growth. Advanced chips cost more to make, but they also sell for much more.

3. There is no easy alternative. Building a chip factory capable of making 2nm chips costs tens of billions of dollars and takes years. TSMC’s main rival, Samsung, is growing its foundry business, but TSMC still makes the large majority of the world’s most advanced chips. Customers cannot simply switch suppliers.

The result is a seller’s market. When demand is higher than supply, the supplier can choose its customers, set its prices, and plan years ahead with confidence. That is exactly the position TSMC is in today.

TSMC is spending $40.9 billion to catch up with demand

TSMC is not sitting still. On 10 November, its board of directors approved a new investment of $40.9 billion. The money is planned for expanding advanced-process production capacity, upgrading equipment, expanding advanced packaging facilities, building new factories, and research and development spending next year.

The company has also said it expects capital expenditure from 2026 to 2028 to be significantly higher than in the previous three years, as it expands capacity to meet customer demand.

The scale of the spending shows how confident TSMC is that the AI boom will last. Factories of this kind take years to build and equip. A company does not commit $40.9 billion unless it believes demand will still be strong when those factories open.

TSMC is also expanding in the United States. Its factory complex in Taylor, Texas, is preparing to expand production capacity, with the first factory installing equipment and preparing to start operations by the end of the year, while a second factory is going through permitting and site preparation.

TSMC is now investing in its own customers

In an unusual move, TSMC’s board also approved direct investments in the AI companies that buy its chips. The board agreed to invest up to $500 million each in OpenAI and Anthropic, the maker of the Claude AI assistant, and up to $500 million more to set up a separate semiconductor industry investment company.

The move ties TSMC even more closely to the AI boom. It is no longer just the factory that makes the chips — it is now a shareholder in the companies whose growth drives demand for those chips. Anthropic itself has just priced its own stock market listing at $70 to $78 a share, targeting a valuation of up to $1.4 trillion, and TSMC is among the backers buying into it.

Industry watchers see the investments as a sign that TSMC believes AI demand will keep growing for years. It is also a way for the chipmaker to secure its place at the centre of the AI industry, rather than simply supplying it from the sidelines.

What the chip shortage means for everyone else

TSMC’s success is good news for its shareholders, but it creates problems for everyone who buys chips — and for the consumers who ultimately pay for them.

Memory chips are running short too. As AI data centres grow, they need not just processors but also huge amounts of memory. Samsung Electronics and SK Hynix, the world’s two biggest memory makers, expect memory supply shortages to persist beyond 2028, because data centre investment keeps growing while it is hard to expand production capacity quickly. TSMC is even producing base dies for the newest high-bandwidth memory (HBM4) in collaboration with SK Hynix.

Prices for electronics could stay high. When the world’s most advanced factory cannot meet demand, chip prices stay firm. That feeds into the price of smartphones, laptops, graphics cards and cloud services. For ordinary buyers, it means the AI boom is unlikely to make devices cheaper any time soon.

Countries are racing to secure supply. Governments in the United States, Europe, Japan and elsewhere are offering subsidies to build chip factories at home, because they do not want to depend entirely on Taiwan for the most important technology of the decade. TSMC’s expansion in the US and Japan is part of that shift, but Taiwan remains the centre of advanced chipmaking.

The AI building boom shows no sign of slowing. Taiwan’s exports hit a record $96.76 billion recently, driven by the same AI demand, and data centre construction is straining power grids in several countries. Even so, companies keep building — and in some places, the rush is already hitting limits. TSMC’s “insatiable” comment suggests the companies ordering chips are not worried about building too much. They are worried about not building enough.

What it means for Pakistan

Pakistan does not make advanced chips, but it is affected by the chip market in several ways.

First, Pakistan imports almost all of its phones, laptops and computer parts. When advanced chips are in short supply and prices stay high, imported electronics cost more in Pakistani shops — and the rupee’s weakness against the dollar makes that worse.

Second, Pakistan’s growing IT industry — including software exporters and freelancers who sell services abroad — depends on affordable cloud computing and AI tools. If the cost of AI computing stays high because chips are scarce, it raises costs for Pakistani tech workers and startups, and it can slow the adoption of AI tools by small businesses.

Third, there is an opportunity. The global shortage has pushed governments and companies to spread chip production and related work more widely. Pakistan’s large, young and English-speaking workforce gives it a chance to grow in chip design support, software, and AI services — but only if it invests in the skills and the reliable electricity that the technology industry needs.

For now, the most direct effect for ordinary Pakistanis is simple: the phones and laptops they buy are unlikely to get cheaper, because the factory that makes the chips inside them cannot keep up with demand.

What happens next

TSMC will report its November revenue on 10 December, and investors will watch closely to see whether the record pace continues. The company’s fourth-quarter revenue forecast is $52.3 billion to $54.3 billion, and October’s result already puts it ahead of the pace implied by that guidance.

The bigger question is how long the boom can last. Some analysts warn that the huge spending on AI data centres could eventually outrun the revenue those centres generate. TSMC’s answer, in effect, is to keep building: $40.9 billion in new investment, stakes in OpenAI and Anthropic, and a bet that demand for computing power will keep growing.

For now, the world’s most important factory has a simple message. It is selling every advanced chip it can make, its customers want more, and it cannot build new factories fast enough. In the words of its own senior executive, demand is “insatiable” — and there is no sign of that changing.

FAQ

What is TSMC?

TSMC, or Taiwan Semiconductor Manufacturing Co., is the world’s largest contract chipmaker. It manufactures chips designed by other companies, including Nvidia, Apple and AMD. It makes most of the world’s most advanced chips.

What does “insatiable demand” mean?

It means customers want to buy more chips than TSMC can produce. TSMC senior vice president Kevin Zhang used the word at the Nikkei Forum in Tokyo on 11 November 2026 to describe demand for the company’s most advanced chips.

How much money did TSMC make in October 2026?

TSMC reported October revenue of NT$586.89 billion, about US$17.9 billion. That was up 59.7 percent from a year earlier and was the highest monthly revenue in the company’s history.

What is a 2-nanometre chip?

It is a chip made using TSMC’s most advanced manufacturing process, where the smallest features are measured at 2 nanometres (a nanometre is one-billionth of a metre). Smaller features mean more transistors on a chip, which makes it faster and more efficient.

Why are AI chips in such short supply?

AI systems need huge amounts of computing power, and that power comes from specialised chips that only a few factories in the world can make. Building new factories takes years and tens of billions of dollars, so supply cannot catch up with demand quickly.

Will chip prices come down soon?

Probably not in the near term. TSMC says demand still exceeds its ability to supply, and memory makers expect shortages to last beyond 2028. That suggests prices for advanced chips — and the devices that use them — are likely to stay high.

Sources

This article is for general information and education only. It is not legal or financial advice.

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