Here’s Why Taiwan Semiconductor Manufacturing Holds the Keys to AI’s Explosive Growth

Core Insights - The AI revolution has rapidly expanded since 2023, significantly increasing market value and driving demand for specialized hardware and data centers [2] - Supply chain bottlenecks, particularly in advanced manufacturing, are limiting the scalability of new AI capabilities [3] - Taiwan Semiconductor Manufacturing is a critical player in determining the pace of AI expansion due to its control over advanced packaging technology [5] Company-Specific Developments - Alphabet has reduced its 2026 production target for Tensor Processing Units from approximately 4 million to 3 million units due to limited access to Taiwan Semiconductor's CoWoS advanced packaging capacity [4][7] - Nvidia has secured over half of Taiwan Semiconductor's CoWoS capacity through 2026 and 2027, giving it a competitive advantage in scaling AI accelerators [5][6] - The competition among chipmakers for production capacity at Taiwan Semiconductor is intensifying, with companies like Google facing constraints in scaling their output [6][7]