TSMC Invests $64 Billion and Secures Production Capacity for NVIDIA

TSMC plans to invest up to $64 billion this year to meet strong demand for semiconductor manufacturing capacity. The Taiwanese company, which produces chips for NVIDIA among others, reported a 69 percent increase in profit for the last quarter.

According to TSMC, the record sum will flow into expanding production capacity. The company points to sustained high demand from customers over multiple years. Taiwan Semiconductor Manufacturing Company (TSMC) is the world's leading contract manufacturer of semiconductors and produces chips for technology companies such as NVIDIA, Apple and AMD.

Profit Surge in Third Quarter

In the third quarter, TSMC increased its profit by 69 percent year-over-year. The stock closed at $422.25 on 15 October 2026. Over the six months prior, the stock gained 16.21 percent. For comparison: the Insider Monkey Billionaire Index rose 15.4 percent in the same period, while the S&P 500 Index rose 11.4 percent.

The strong development reflects the central role TSMC plays in the global semiconductor supply chain. The company manufactures cutting-edge chips in processes that few other manufacturers master. Chips for data centers and artificial intelligence are currently in particularly high demand – areas where NVIDIA appears as one of the largest customers.

Significance for NVIDIA

For NVIDIA, TSMC is the most important manufacturing partner. The graphics processors and AI accelerators of the US company are produced almost exclusively in Taiwan. The announced investments by TSMC thus also secure production capacity for NVIDIA's growing business in data centers and artificial intelligence.

The high investments also suggest that TSMC expects sustained strong demand. This should also benefit NVIDIA, which depends on sufficient manufacturing capacity to deliver its products on time. In the past, bottlenecks in chip manufacturing led to supply problems throughout the technology industry.

Market Environment Remains Tight

Developments at TSMC are occurring in a challenging market environment. The yield on ten-year US Treasury bonds exceeded five percent for the first time in nearly 20 years. Higher interest rates typically burden growth stocks such as NVIDIA, as they make future profits appear less valuable from today's perspective.

At the same time, Warren Buffett, head of investment company Berkshire Hathaway, warned of excessive valuations in the stock market. Nevertheless, investors continue to see opportunities in selected technology stocks. TSMC's investment plans underscore the structural demand for semiconductors, from which companies like NVIDIA benefit.

Outlook for the Semiconductor Industry

TSMC expects demand for advanced semiconductors to remain strong over several years. This assessment is based on the ongoing boom in artificial intelligence, cloud computing and data centers. For NVIDIA, this means a secure supply chain and predictable production volumes.

The $64 billion that TSMC is investing this year will flow into new factories, more modern manufacturing facilities and the development of even smaller chip structures. The smaller the structures, the more powerful and energy-efficient the processors become. NVIDIA is already relying on manufacturing processes for its latest products that only TSMC and Samsung master on a larger scale.