TSMC SVP Reports 90% Surge in Equipment Orders in Six Months Driven by AI Demand: Equivalent to Building 20 Fabs Globally Simultaneously

September 6, 2026

TechSoda Taiwan

Overview

TSMC Senior VP Cliff Hou reported an astonishing 90% surge in equipment orders over six months, driven by AI demand far exceeding forecasts, equivalent to constructing nearly 20 fabs worldwide simultaneously. Unimicron Technology’s chairman stated that AI chips are driving larger, multi-layered, and more complex substrates, leading to ‘extremely tight’ ABF substrate capacity. Critically, key upstream materials like T-Glass are heavily dependent on small and medium-sized Japanese suppliers, exacerbating the severe shortage.

In Depth

Key Findings

TSMC Senior Vice President Cliff Hou reported an astonishing 90% surge in TSMC’s equipment orders over the past six months, driven by AI demand that has far outstripped previous forecasts. He noted that the scale of this demand is equivalent to simultaneously building approximately 20 semiconductor manufacturing fabs worldwide. This severe strain is echoed by Chien Shan-Chieh, Chairman of Unimicron Technology, who emphasized that AI chips are pushing for larger, multi-layered, and more complex substrates, leading to an ‘extremely tight’ capacity for ABF (Ajinomoto Build-up Film) substrates. A significant contributing factor to this acute shortage is the heavy reliance on small and medium-sized Japanese enterprises for key upstream materials like T-Glass (glass substrates).

Technical & Clinical Details

AI chips, particularly GPUs and ASICs (Application-Specific Integrated Circuits), require massive packages with multiple cores, HBM (High Bandwidth Memory), and complex interconnections to process vast amounts of data at high speeds. Manufacturing such chips necessitates not only cutting-edge wafer process technology but also advanced packaging techniques like CoWoS (Chip-on-Wafer-on-Substrate). CoWoS integrates multiple chiplets via an interposer and achieves high-bandwidth connections with HBM, but its manufacturing process is exceptionally complex, and expanding production capacity demands significant time and investment.

ABF substrates play a crucial role in electrically connecting the processor and HBM within CoWoS packages, vital for maximizing AI chip performance. ABF substrates for AI chips demand 2.6 to 3 times larger areas and 12 to over 18 layers compared to traditional substrates, significantly increasing manufacturing difficulty. This leads to challenges in maintaining yields and concentrates demand among a limited number of suppliers. Furthermore, glass substrates (T-Glass) are gaining attention as a next-generation packaging material, requiring innovative technologies like TRUMPF’s HiPIMS (High Power Impulse Magnetron Sputtering) for their fabrication.

Background & Context

The explosive growth of AI has had a widespread impact across the entire semiconductor supply chain, creating shortages and bottlenecks at every stage, from front-end wafer fabrication to packaging, substrates, and materials. Reports that Nvidia is securing the majority of global CoWoS capacity indicate that major AI chip players are striving to dominate the supply chain. Governments, including those enacting the U.S. CHIPS Act and the European Chips Act, are also providing policy support for strengthening domestic semiconductor manufacturing capabilities and diversifying supply chains, which in turn encourages investment from key suppliers like TSMC and Unimicron.

Strategic Significance & Outlook

The surge in TSMC’s equipment orders and the severe ABF substrate shortage suggest that the AI chip demand-supply gap will not be resolved in the short term. Particularly, the bottleneck in upstream materials like T-Glass, which are heavily dependent on small and medium-sized Japanese companies, threatens the overall resilience of the supply chain. This situation is prompting the entire semiconductor industry to re-evaluate the importance of broader supplier collaboration, investment in new manufacturing technologies, and strategic material procurement. The commercialization of glass substrate technology and the emergence of alternative packaging solutions like Intel’s EMIB-T will be key to stabilizing future AI chip supply chains. The expansion of AI computing will fundamentally reshape the cooperative dynamics of the semiconductor industry and accelerate further innovation.

Source: https://techsoda.substack.com/p/global-market-watch-tsmcs-cliff-hou

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