TSMC Approves $31.28B Capital Budget with $20B for Arizona Expansion Amid AI Chip Demand Boom
Tags Infrastructure · AI
TSMC's board approved a $31.28 billion capital budget on May 12, 2026, including up to $20 billion for its Arizona subsidiary, as the company expects 2026 capex at the high end of its $52-56B range. Q1 2026 EPS hit a record NT$22.08. TSMC's 3nm capacity remains constrained and CoWoS advanced packaging is in short supply, pushing some customers toward alternative packaging providers. The Arizona expansion faces water and labor shortages. TSMC also increased its quarterly dividend to NT$7/share from NT$6/share.
Technical significance
TSMC's $31.28B capital budget and the constrained 3nm/CoWoS supply underscore that the AI compute boom is fundamentally a semiconductor manufacturing bottleneck. The $20B Arizona investment is strategically significant for US semiconductor sovereignty, but water and labor shortages highlight the practical challenges of replicating Taiwan's chipmaking ecosystem. The CoWoS packaging shortage is particularly critical since advanced AI chips depend on this packaging technology.