Wedbush: TSMC's AI Supply-Demand Gap to Persist for Years, 2026-2027 Earnings May Beat Expectations
N.R. Finch
TSMC CEO C.C. Wei told shareholders that AI chip demand will outstrip supply for years, even as U.S. capacity comes online — a signal Wedbush sees pointing to sustained earnings beats in 2026-2027.
"Demand exceeds supply for years" — what does that actually mean?
C.C. Wei stated plainly: even with new U.S. fabs ramping, TSMC cannot meet AI-driven chip demand for the foreseeable future.
Wedbush analyst Matt Bryson noted this aligns closely with what Broadcom CEO Hock Tan said the night before — Broadcom's backlog is surging as major customers push orders out to 2028 to secure capacity.
This means → advanced nodes (the most cutting-edge chip manufacturing processes) and advanced packaging (assembling multiple chips into one unit) will run at effective full utilization for years, keeping TSMC's pricing power intact beyond 2026.
Why could 2026-2027 beat Wall Street estimates?
Bryson sees three tailwinds stacking up: controlled, periodic price increases; a product-mix upgrade as the 2-nanometer node (TSMC's next-generation process) enters mass production; and steady output from mature nodes (older but reliably demanded processes).
In plain terms = price hikes + a richer product mix + no drop in legacy volume — all three lines pulling upward at once.
The key condition: flawless execution, especially 2nm ramping on schedule — that is the biggest uncertainty.
How does C.C. Wei view pricing?
He reaffirmed revenue growth of over 30% this year and signaled willingness to raise prices — but in a "measured, sustainable manner."
He drew a direct contrast with memory chipmakers: TSMC will not hike prices abruptly.
This reflects a strategy of trading modest price increases for long-term customer lock-in, rather than maximizing short-term margin.
Where is the next growth driver?
Wei named two areas at the shareholder meeting: robotics and autonomous driving, calling them the next long-term growth engines.
TSMC shares fell 1.9% in pre-market trading on Friday — a muted short-term reaction.
This means → investors are focused on near-term supply-demand dynamics and 2nm progress; the longer-term narrative still needs time to prove out.
Content is for reference only, not financial advice.