TSMC enters 2026 as a key beneficiary of the AI boom and, at the same time, as a company at the epicenter of rising geopolitical pressure. In January, the company reported revenue of $12.7 billion, up 37% year-on-year, significantly exceeding its full-year expectations, with growth remaining around 30%. Orders for the production of advanced chips for AI infrastructure continue to drive revenue, reflecting investor positioning ahead of the anticipated OpenAI IPO. This broader optimism has also been visible in premarket movers, where semiconductor and AI-linked stocks frequently set the tone for early trading. Notably, the seasonal slowdown typical of the beginning of the year did not materialize this time.
Rising demand is forcing TSMC to dramatically increase capital expenditures, which are expected to grow by about a quarter in 2026, to a record $56 billion. The company is expanding and modernizing production not only in Taiwan, but also in the USA, Japan, and Europe, where it is preparing to launch a joint venture in Germany. At the same time, the Taiwanese authorities emphasize that, even amid active expansion abroad, the island will remain the anchor of TSMC’s business for the foreseeable future, as the infrastructure, personnel, and supply chains have been built here for decades and cannot be quickly transferred.
In this context, the administration of US President Donald Trump is increasing pressure on the industry through trade policy. Temporary breaks on semiconductor imports are being replaced by a new system of duties and quotas, with the key criterion being the degree of involvement in American production. Companies that order chips from TSMC and, at the same time, invest in computing power in the United States will be able to expect benefits, while outside of these programs, imports will be subject to increased tariffs. In fact, we are talking about financial incentives for localization, tied to the scale of TSMC’s investments, which have already reached up to $165 billion in Arizona, where the company’s factory produces chips for Nvidia, Apple, and other major technology players.
Washington’s political ambitions go even further. Statements about the desire to concentrate up to 40% of TSMC’s chip production in the United States sparked significant tension in Taiwan and forced local authorities to publicly justify their actions to the public. According to more realistic estimates, by 2036, up to 20% of production for 5 nm and thinner processes may be concentrated in the United States, while Taiwan’s share is unlikely to fall below 85% by 2030. Even an accelerated transfer of production, according to experts, can reduce the technological gap between foreign factories and Taiwanese factories to a maximum of one year; new technological processes will still be mastered on the island faster.
Economic motives for diversification complement geopolitical ones. Limited land, energy, and water resources, and frequent natural disasters make expansion outside Taiwan logical from a risk-management perspective. That is why TSMC plans to increase the number of enterprises in the United States to almost twelve, while simultaneously developing facilities in Japan and Europe. However, analysts agree that a significant migration of chip production outside Taiwan will become noticeable only in the second half of the next decade, and the real independence of the global semiconductor industry from the island will not come before the middle of the century.
Thus, TSMC’s rapid revenue growth in the wake of the AI boom is accompanied by a long-term, costly process of reallocating production capacity. The United States gains leverage through tariffs and investment incentives, but Taiwan will remain the heart of the global semiconductor industry for the foreseeable future — despite all attempts to accelerate this historic shift.
