Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) laid out a bigger view of how large the worldwide chip business could become by the end of the decade, pointing to artificial intelligence (AI) as the main engine behind the growth.

According to presentation materials released ahead of the company's technology symposium in Hsinchu on Thursday, as reported by Reuters, Taiwan Semiconductor projects the global semiconductor market is expected to surpass $1.5 trillion by 2030, up from the previous forecast of $1 trillion.

AI Fuels Growth

Most of the growth would come from booming demand for artificial intelligence and high-performance computing, which is expected to account for 55% of the total semiconductor market. This will be followed by 20% from smartphones and 10% from the automotive applications.

The company also projects AI accelerator wafer demand will rise 11 times between 2022 and 2026.

Capacity Expansion Plans

The world's largest contract chipmaker outlined buildout plans to meet AI-driven needs in both manufacturing and packaging. The company said it accelerated capacity additions in 2025 and 2026 and intends to start nine new stages of wafer fabs and advanced packaging sites in 2026.

The company's board has approved $31.28 billion in capital spending to expand advanced chip manufacturing capacity, construct new fabs and install facility systems to support rising demand for AI, 5G and high-performance computing chips.

Taiwan Semiconductor expects to increase output for its 2-nanometer and next-generation A16 technologies at a 70% compound annual growth rate from 2026 through 2028. It also pegged capacity growth for its CoWoS (Chip on Wafer on Substrate) advanced packaging at more than 80% on a CAGR basis from 2022 to 2027.

CoWoS is widely used in AI chips, including those designed by Nvidia Corp. (NASDAQ:NVDA).

Global Footprint Expansion

TSM has a substantial presence in global portfolios, with nearly every chip designer depending on the company's cutting-edge manufacturing nodes. It updated details on the U.S., Japan, and Germany manufacturing footprint in the report.

In Arizona, the company's first plant is already in production and equipment installation for the second one is scheduled for the second half of 2026. The third plant is under construction. Work at the fourth plant is expected to begin this year, along with the site’s first ​advanced packaging facility.

Taiwan Semiconductor bought a second large plot in Arizona for future expansion. With all these developments, the chipmaker projects Arizona output will increase 1.8 times by this year.

In Japan, the first plant is producing 22-nanometer and 28-nanometer products in volumes, while the second one has been upgraded to 3-nanometer due to strong demand.

The German plant is under construction and is progressing as expected, with plans to offer 28-nanometer and 22-nanometer ​technologies, followed by 16-nanometer and 12-nanometer technologies.

Benzinga Edge Stock Rankings indicate that TSM has a Momentum score in the 89th percentile with a strong price trend in the short, medium and long term. It also has a solid Growth score in the 93rd percentile.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.

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