Cost concerns have raised doubts about the longevity of the artificial-intelligence boom, but the world's largest contract chip maker sees no signs of a pullback in appetite for the semiconductors that power AI.
C.C. Wei, chief executive of TSMC, said customer demand continues to outpace the company's ability to add manufacturing capacity.
Speaking at an annual shareholders' meeting on Thursday, the CEO said TSMC plans to add even more production, expanding operations in Taiwan, Japan, Germany, and the U.S., where it has major clients like Apple and Nvidia.
"We are working very hard to build production lines in the U.S., but it is still not enough, far from enough," Wei said, noting that most of the demand for high-end chips comes from U.S. clients.
As the rapid evolution of AI raises computing requirements, Wei predicts a sustained rise in demand for advanced semiconductors.
"Our customers and their customers continue to give us a very positive outlook on AI," Wei said. "We remain confident in the long-term AI megatrend and continue to see semiconductors as a fundamental necessity."
Still, TSMC is keeping a close eye on component costs in price-sensitive consumer markets, as well as geopolitical developments in the Middle East that pose supply-chain risks.
The conflict has disrupted supplies of energy and key industrial inputs like helium, raising costs across manufacturing sectors. To protect margins, some companies have raised product prices.
But Wei seemed to be against the idea of hiking prices of TSMC chips, even with demand booming and costs climbing.
TSMC won't adopt the pricing practices seen in the memory-chip industry, where producers sharply increase prices during supply squeezes, the CEO said.
"Our customers are partners," he said.
TSMC's meeting took place against a backdrop of heightened industry competition, with Samsung Electronics and Intel pushing ahead with next-generation production technologies, closing the gap on the Taiwanese company.
It is a challenge that hasn't fazed Wei, who struck a confident tone about his company's ability to stay on top and maintain its competitive advantage as firms vie for global tech talent, as highlighted by TSMC's continuing legal battle with a former executive who joined Intel.
"We will absolutely do everything in our power to protect TSMC's own technology and information confidentiality," Wei said.
Commenting on Elon Musk's plan to build his own chip fab, Wei said, "I wish him the best."
"We have never lacked competitors over the past nearly 40 years," he said. "We have always been a winner, and that will continue in the future."