TSMC: AI Chip Demand Surges, 2nm Shift Accelerates

According to a statement made on November 11, TSMC is facing overwhelming demand for advanced semiconductors, with customers urgently seeking chips capable of powering artificial intelligence (AI) applications, according to TSMC Senior Vice President and Co-Chief Operating Officer Zhang Xiaoqiang.

Zhang said that demand for computing power has reached unprecedented levels, with both direct customers and their end customers actively competing for available resources. He emphasized that computing power has become one of the most valuable assets in the AI industry, describing current demand as virtually insatiable.

He also noted that customers are increasingly transitioning to more advanced semiconductor manufacturing processes, moving from 5nm technology toward TSMC's latest 2nm process. However, meeting the growing requirements of future AI applications will depend not only on transistor and wafer technology but also on advances in advanced packaging, which plays an increasingly important role in improving chip performance and integration.

Discussing Japan's strategic importance to TSMC, Zhang highlighted the market's significant potential despite its relatively small contribution to the company's overall revenue. Japan currently accounts for approximately 4% of TSMC's global revenue. Nevertheless, its diverse technology landscape and application markets present considerable opportunities for future semiconductor development.

Zhang also identified physical AI as an important emerging driver of advanced semiconductor demand. In May 2026, TSMC announced a partnership with Sony to jointly develop and manufacture next-generation image sensors designed for physical AI applications. These technologies are expected to support intelligent systems that interact with and operate in real-world environments.

Given Japan's strong manufacturing sector and its potential applications for physical AI, Zhang expects adoption of advanced semiconductor technologies in the Japanese market to increase significantly in the coming years.