TSMC Shatters Records: 160K 3nm Wafers/Month Now Fueling Nvidia’s AI Dominance

Taiwan's semiconductor giant goes into overdrive as demand for next-gen chips explodes.

The 3nm Arms Race Heats Up

TSMC's massive production ramp comes as Nvidia scrambles to meet insatiable demand for AI accelerators. The 160,000 wafer/month output marks a watershed moment for advanced semiconductor manufacturing.

Silicon Supremacy at What Cost?

While tech giants cheer this manufacturing milestone, analysts whisper about the $20 billion+ price tag for these cutting-edge fabs - a bet that only makes sense when your customers are printing money with AI hype. The semiconductor industry's brutal economics just got even more extreme.

AI growth drives heavy wafer demand

Nvidia’s rise has been extraordinary. In October, the company hit a $5 trillion market value, becoming the first chipmaker in history to reach that milestone. Wei even called Jensen the “five-trillion-dollar man.”

But rapid growth also brings supply pressure. When asked about possible memory shortages, Jensen said demand across the AI industry remains intense and that there will be “shortages of different things.”

He pointed to SK Hynix, Samsung, and Micron as key memory suppliers that have ramped up production to support Nvidia’s growing hardware lineup.

“We have three very, very good memory makers… they have scaled up tremendous capacity to support us,” Jensen said. He also confirmed Nvidia had received the most advanced chip samples from all three suppliers.

On memory pricing, Jensen was clear: “It’s for them to decide how to run their business.” That statement came shortly after SK Hynix said it had sold out all its chip production for next year and was planning a big investment increase amid what it called an extended chip “super cycle” powered by AI demand.

Meanwhile, Samsung Electronics said it was in “close discussion” with Nvidia to supply its upcoming HBM4 high-bandwidth memory.

Jensen also addressed the question of Blackwell chip exports to China, saying there were “no active discussions” about sales there, due to U.S. restrictions.

Under President Donald Trump’s administration, the sale of high-end AI chips to China remains blocked, on grounds that the technology could benefit China’s military and AI sector.

TSMC boosts investments amid AI-fueled demand

Bolstered by strong AI-related orders, Wei said TSMC has raised its 2025 revenue growth forecast to the mid-30% range, up from its previous expectation of about 30%. The company also lifted its annual spending floor for capacity expansion and upgrades to $40 billion, compared to the earlier $38 billion.

Analyst William Li of Counterpoint Research noted that the company’s strong results were fueled by 3 nm traction and high utilization at 4 nm and 5 nm, driven by orders from AI GPU and HPC clients, as well as premium smartphone platforms.

Wei also mentioned that TSMC is watching U.S. tariff developments closely as Taiwan negotiates for a lower “reciprocal” rate with Washington. Although the U.S. is weighing new semiconductor duties, TSMC is expected to receive partial exemptions.

“We understand there are uncertainties and risks from the potential impact of tariff policies, especially in consumer-related and price-sensitive market segments,” Wei said, noting that the company will continue to plan around those risks.

The company has also been investing heavily in U.S. facilities, a MOVE that could help limit exposure to tariffs in the long run. So far, TSMC’s shares in Taiwan have risen more than 38% this year, reflecting strong investor confidence as the world’s top contract chipmaker continues expanding its footprint to meet the world’s hunger for AI hardware.

Sign up to Bybit and start trading with $30,050 in welcome gifts