Taiwan Semiconductor Manufacturing Co. stated on Thursday that its capital spending is expected to increase by at least 27% this year, reaching between $52 billion and $56 billion. The company, which manufactures chips for Nvidia and Apple, is often viewed as a key indicator for the artificial intelligence market.
"Moving into first quarter 2026, we expect our business to be supported by continued strong demand for our leading-edge process technologies," said Wendell Huang, TSMC's chief financial officer, in a news release.
TSMC recently reported a 35% surge in profit to a record high, exceeding analysts' estimates. As the world's largest dedicated contract chip manufacturer, the company benefits from major technology firms' aggressive investments in artificial intelligence. Amazon announced late last year a $50 billion investment to expand AI and supercomputing capabilities for U.S. government customers. This week, Meta CEO Mark Zuckerberg said his company was launching Meta Compute, an initiative to build out its AI infrastructure.
Counterpoint Research senior analyst Jake Lai told CNBC that 2026 will be another "breakout year" for AI server demand. "The demand for AI remains very strong, driving overall chip demand across the entire server industry," Lai said.
Nvidia CEO Jensen Huang said earlier this month that customer demand in China is "very high" for the chipmaker's H200 AI chips. President Trump officially approved exports of these chips to China this week.
Analysts at Goldman Sachs wrote last month that Wall Street consensus estimates for hyperscaler AI companies' 2026 capital spending grew from $465 billion at the start of the third-quarter earnings season to $527 billion in December. They added that "analyst estimates have consistently underestimated capex spending related to AI."
Not all observers are convinced that AI growth is sustainable. CNBC compiled thoughts from 40 tech executives, analysts, and experts over the past four months on the potential for an AI bubble. The resulting chart shows a range of concerns from figures including Microsoft co-founder Bill Gates, JPMorgan CEO Jamie Dimon, and Federal Reserve Chair Jerome Powell.