TSMC's Tech Roadmap, Outlook, and the Semis Sell-Off

TSMC’s Outlook

Our view is that we’re in the midst of a long term semis bull market driven initially by the AI data center buildout, which will be followed in the 2030s by the rise of physical AI such as humanoid robotics. TSMC’s CC Wei has a similar view:

“I believe from this day on all the way to probably 2029, 2030, the demand is very strong. Whether in between there’s a dip or not, I’m not very sure. But the trend is so robust that I believe we are witnessing a kind of a new industry. I would like to say the new AI industry, which is so common in our daily life, it’s going to affect automotive, humanoid robots, and also impact all the industry. The amount of money put in by the CSPs alone is a very important new industry to the world, so the demand will be there. And the fundamental thing about semiconductor chips, most of them are TSMC.”

source: TSMC

While scaling laws continue to be strong in training:

Most of the growth in AI demand in the coming decades will be in inference:

Due to the combination of scaling laws and then the ramp in inference, demand is currently off-the-charts for TSMC’s leading edge nodes. The company showed this nice chart at their recent symposium which is indicating a steep increase once again in AI accelerator demand this year:

In the years ahead, Wei has to estimate where the real demand is going to be. This is how he goes about it:

“Because all the customers are very aggressive, and that’s the CEO’s job. CEO got to be aggressive. They give me the number of their demand, and I believe they try their best to tell me the truth. So, I put all together, and all the truths together is not a truth. Mark down that word. So, yes, we do a very careful judgment. May not be correct, but we did carefully because this is big money, right? So, we are checking the AI data centers progress, the building, the location, the demand, the racks, we’re checking all that to make sure that TSMC chips will not be put in inventory. This year, we say…