First up, the company will add a new N3-capable fab module to its Gigafab cluster at Tainan Science Park, aiming to start volume production in the first half of 2027. While TSMC has been building the fab module for some time, this is the first time it has disclosed its capabilities.
Secondly, TSMC's N3-capable Fab 21 phase 2 in Arizona is on track to come online in the second half of 2027. This is the first time the foundry has clarified when Fab 21 phase 2 is set to begin making chips. TSMC's CEO also confirmed that the company had acquired the second plot of land near Fab 21 to build additional fab modules, though he never confirmed how many fab modules would be built.
Thirdly, the company plans to upgrade the capabilities of its Fab 23 phase 2 (aka JASM phase 2) to 3nm by installing more advanced equipment. Originally, Fab 23 phase 2 was projected to make chips on N6 (6nm-class) and N7 (7nm-class) fabrication technologies, then TSMC pondered upgrading it to N4 (4nm-class) . Now, the plan is to make it N3-capable when it comes online in 2028.
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The decision to add 3nm capacity was not made overnight, though it looks like TSMC expects demand for FinFET-based N3 — its final FinFET node — to remain strong well into the second half of the decade (it takes a year to ramp up a fab, so these three fabs will contribute meaningfully to TSMC's capacity in 2028 – 2029). Separately, the company will continue converting N5-capable facilities into N3-capable fabs in Taiwan and make some of its fabs capable of building chips on N7, N5, and N3 nodes.
"In addition to all the new fabs, we continue to convert 5nm tools to support 3nm capacity in Taiwan," Wei added. "We are also leveraging our manufacturing excellence to drive greater productivity across our fab in all locations to generate more wafer output. We are also focusing on capacity optimization across nodes, including flexible capacity support among N7, N5, and N3 nodes."
One of the main challenges for TSMC's expansion is to get fab tools to support new capacity as fast as possible, but this is not easy, as leading suppliers of semiconductor production equipment are also constrained in terms of capacity.
"We try very hard to speed it up and pull in all the equipment as we can, [but] our supply is very tight," Wei said. "Demand is continuing to increase, so we continue to work with our suppliers to speed it up."
As far as TSMC's N2 and A16-capable capacity is concerned, the company is currently ramping Fab 20 in Hsinchu Science Park and Fab 22 in Kaohsiung Science Park. While the capacity of the former will remain largely intact in the coming years, Fab 22 will gain capacity aggressively over time, according to Global Semi Research , though TSMC did not touch upon N2 capacity expansion during the earnings call.
TSMC's first quarter revenue reached $35.9 billion, an increase of 40.6% year-over-year, and a 6.4% rise over the previous quarter. The company's net income totaled $18.2 billion, which is the company's highest net profit for a quarter, while its gross margin was 66.2%. TSMC expects its Q2 2026 revenue to be between $39 billion and $40.2 billion, which is a 32% year-over-year growth.
"Our business in the first quarter was supported by strong demand for our leading-edge process technologies," said Wendell Huang, Senior VP and Chief Financial Officer of TSMC. "Moving into second quarter 2026, we expect our business to be supported by continued strong demand for our leading-edge process technologies."
In addition, the company indicated that for the full year 2026, it expects revenue to increase to over 30% (up from its original expectations of around 30%) over the previous year to approximately $158 billion, which gives it an opportunity to increase its CapEx budget towards the high-end of its guidance between $52 billion and $56 billion.
Meanwhile, TSMC warned that its costs may increase due to the ongoing war in the Middle East.
"In addition, given the recent situation in the Middle East, prices for certain chemicals and gases are likely to increase," said Huang. "Based on our current assessment, there may be impact to our profitability, but it is too early to quantify the impact."
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Anton Shilov is a contributing writer at Tom\u2019s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends. ","collapsible":{"enabled":true,"maxHeight":250,"readMoreText":"Read more","readLessText":"Read less"}}), "https://slice.vanilla.futurecdn.net/13-4-20/js/authorBio.js"); } else { console.error('%c FTE ','background: #9306F9; color: #ffffff','no lazy slice hydration function available'); } Anton Shilov Social Links Navigation Contributing Writer Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
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