TSMC Commands 73% of Outsourced Chip Spending as AI Boom Drives $60 Billion Capex
Updated
Updated · The Motley Fool · Aug 24
TSMC Commands 73% of Outsourced Chip Spending as AI Boom Drives $60 Billion Capex
3 articles · Updated · The Motley Fool · Aug 24
Summary
TSMC is positioned to capture the broadest gains from the AI chip boom because hyperscalers' shift toward custom silicon still leaves them dependent on its manufacturing and packaging.
73% of third-party chipmaking spending went to TSMC in the first quarter of 2026, reflecting a technology lead and scale that rivals still cannot match at required quality and speed.
Capacity is tight enough that TSMC plans $60 billion to $64 billion in capital spending this year, up from $40.9 billion last year, to expand output for advanced AI chips.
Amazon and Alphabet are increasing use of in-house AI chips to cut costs, while design partners can change, but those chips still largely run through TSMC's fabs.
At 24.5 times forward earnings with analysts projecting 30% EPS growth over the next two years, the company is presented as a relatively inexpensive AI infrastructure winner.