TSMC's Supply Squeeze Through 2028 Could Be This Chipmaker's Big Break As AI Demand From Nvidia, Apple Surges

Samsung Electronics Co. (OTC:SSNLF) may be poised to capitalize on a growing supply crunch at Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) as surging AI chip demand forces major customers to look beyond the industry leader.

TSMC Capacity Maxed Out As AI Demand Surges

According to industry reports, TSMC has effectively booked out its most advanced 2-nanometer capacity through 2028, The Korean Herald reported.

This is driven by orders from chip heavyweights including Nvidia Corp (NASDAQ:NVDA), Apple Inc. (NASDAQ:AAPL), Advanced Micro Devices, Inc. (NASDAQ:AMD) and Qualcomm Inc. (NASDAQ:QCOM).

Even its planned Arizona facility, expected to begin production around 2030, is reportedly nearing full allocation before construction begins.

The bottleneck underscores the strain created by the AI boom, where demand for cutting-edge chips continues to outpace supply.

Samsung Positioned As Only Viable Alternative

Samsung Electronics is emerging as the primary alternative, as it remains the only other manufacturer capable of producing chips at the 2nm node, the report said.

While TSMC dominates the global foundry market, the competition narrows significantly at advanced nodes below 5nm, effectively making it a two-player race.

Samsung, historically challenged by lower yields and a smaller client base, is showing signs of progress.

Its 2nm yield has reportedly improved to around 60%, and the company is gaining traction with major customers, including Tesla Inc. (NASDAQ:TSLA), Apple and Nvidia, while also exploring collaborations with AMD and Arm Holdings Ltd (NASDAQ:ARM).

Samsung and TSMC did not immediately respond to Benzinga’s request for comments

AI Boom Drives Strategic Shift In Chip Production

The company is ramping up efforts to capture this opportunity. Its Taylor, Texas, facility is set to begin operations later this year.

Its Pyeongtaek P5 complex is being developed with flexible "hybrid" production capabilities that can switch between advanced logic and memory chips — a key advantage as AI workloads increasingly require both.

Price Action: Shares of TSMS closed at $316.50 on Monday, down 3.13% and slipped a 1.12% in after-hours trading to $312.95, according to Benzinga Pro.

Benzinga Edge Stock Rankings indicate that TSMC is facing short-term downward pressure, while maintaining an upward trend over the medium and long term, with a Quality score in the 97th percentile.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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