Taiwan Semiconductor Manufacturing Company (TSMC) announced on March 27, 2026, that its Board of Directors has approved a record-breaking capital expenditure budget for the 2026 fiscal year, ranging between $52 billion and $56 billion. This figure represents a substantial increase from the $40.9 billion spent in 2025, marking the highest annual investment in the company’s history. The capital allocation is designed to solidify TSMC’s position as the primary foundry for advanced logic semiconductors, specifically targeting the infrastructure requirements of generative artificial intelligence and high-performance computing (HPC).
According to official statements released during the company’s briefing in Hsinchu, approximately 70% to 80% of the 2026 budget will be dedicated to advanced process technologies. This includes the continued capacity expansion of the 2-nanometer (N2) family, which entered mass production in late 2025, and the initial tool installation for the upcoming 1.4-nanometer (A14) process node. TSMC Chairman and CEO C.C. Wei stated that the decision to increase spending is driven by a multi-year structural demand for silicon-intensive AI applications. Wei noted that the complexity of next-generation nodes requires significantly higher capital intensity, particularly for new lithography equipment and advanced packaging facilities.
A significant portion of the 2026 expenditure—approximately 10% to 20%—is earmarked for advanced packaging, testing, and mask making. TSMC confirmed plans to expand its Chip on Wafer on Substrate (CoWoS) and System on Integrated Chips (SoIC) capacity to address persistent bottlenecks in the AI chip supply chain. The company expects to more than double its advanced packaging output by the end of 2026 compared to 2024 levels, supporting major customers such as Nvidia and AMD in their efforts to scale AI accelerator production.
The 2026 plan also supports TSMC’s international expansion strategy. The company confirmed that funds will be utilized for the continued buildout of its Fab 21 campus in Phoenix, Arizona, which is integrating 3nm and 2nm capabilities. Additionally, the budget covers the expansion of the Japan Advanced Semiconductor Manufacturing (JASM) site in Kumamoto and the European Semiconductor Manufacturing Company (ESMC) facility in Dresden, Germany. These global sites are increasingly integrating advanced N3 and N2 capabilities to serve regional customers in the automotive and industrial sectors.
Chief Financial Officer Wendell Huang emphasized that while the capital expenditure is increasing by up to 37% year-over-year, the company remains committed to its long-term gross margin target of 53% or higher. Huang cited TSMC's robust 2025 revenue of $122.4 billion as a key factor enabling the aggressive investment. The company projects that its 2026 revenue will grow by nearly 30% in U.S. dollar terms, significantly outpacing the broader foundry market's expected growth of 14%.