Taiwan Semiconductor's management confirmed capital expenditures of US$60 to 64 billion for 2026, and clarified that cumulative spending from 2026 to 2028 will far exceed the roughly US$101 billion total of the past three years. JPMorgan believes this provides upstream semiconductor equipment suppliers with long-term order visibility across fiscal years. Among them, equipment vendors whose businesses are highly dependent on foundry clients such as Taiwan Semiconductor will benefit most directly from this wave of capital expenditure.
$Taiwan Semiconductor (TSM.US)$It announced strong third-quarter results and signaled future investments that far exceeded market expectations.
Taiwan Semiconductor announced its third-quarter earnings on October 15, reporting quarterly revenue of US$46.6 billion, up 16% quarter-over-quarter and about 2% above the Bloomberg consensus estimate. The company's fourth-quarter revenue guidance midpoint stands at US$53.3 billion, roughly 6% above the consensus forecast, while its full-year growth outlook is pegged at 44%.
Even more closely watched by the market, management confirmed that capital expenditures for 2026 will remain in the $60 billion to $64 billion range, while further clarifying that total capital spending over the three-year period from 2026 to 2028 will significantly exceed the historical aggregate of approximately $101 billion recorded from 2023 to 2025.
According to Wind Trading Desk, on October 16, JPMorgan's Mio Shikanai team released a report stating that the company's management not only maintained its recent investment guidance but also extended the certainty of capital expenditures through 2028 and even around 2030, providing semiconductor equipment suppliers with long-term order visibility that transcends a single fiscal year.
JPMorgan pointed out that equipment suppliers with a high proportion of revenue from wafer foundry customers will benefit most directly. Against the backdrop of robust equipment demand and tight supply, Taiwan Semiconductor's practice of sharing its investment plans with suppliers in advance helps alleviate short-term supply-chain pressures while further solidifying the strategic position of leading equipment vendors.
The expansion roadmap is clear, with factory‑building plans spanning Taiwan and multiple overseas markets.
Taiwan Semiconductor's management has disclosed a detailed timeline for capacity expansion. In Taiwan, the company plans to build 13 advanced-chip and advanced-packaging fabs; overseas, it aims to add five to six new fabs.
From a process-node perspective, the A14 technology is expected to enter risk production in 2027 and achieve mass production in 2028. For the N2 process, the company plans to double its capacity by 2027. Meanwhile, the expansion of the N3 process has exceeded previous expectations.
Tainan's original new‑factory plan was slated to begin production in the first half of 2027; however, driven by robust customer demand, management has decided to build an additional Tainan facility, with mass production expected to commence in the first half of 2028.
Overseas, construction of the second fab in Arizona, USA, has been completed and is now in the equipment‑installation phase. Management plans to commence mass production in the third quarter of 2027, slightly ahead of the original schedule.
Mass production of the N3 process at Japan Advanced Semiconductor Manufacturing Co., Ltd.'s (JASM) second fab in Kumamoto is expected to commence in 2028. The company is also steadily advancing the full transition from N5 to N3 across its operations.
Capital expenditures have surpassed historical ranges and may surge again around 2030.
Although the 2026 capital expenditure range remains unchanged at USD 60–64 billion, management has signaled a more optimistic outlook for medium- and long-term spending trends.
Taiwan Semiconductor has made it clear that its cumulative capital expenditures from 2026 to 2028 will far exceed the roughly $101 billion total of the past three years, signaling a much steeper investment acceleration curve.
Management also proactively noted that the company plans to begin deploying high-NA extreme ultraviolet (EUV) lithography equipment around 2030, at which point capital expenditures could rise significantly above current levels.
At present, the costs of equipment, materials, and labor are all rising rapidly; however, management expects that, as investment continues to advance steadily, revenue growth should consistently outpace capital expenditure growth.
Editor/lambor