--- title: "Directly pointing to TSMC's production capacity \"reaching its peak\"! Broadcom publicly warns of a chip supply chain crisis, facing the biggest constraint in the AI arms race" type: "News" locale: "en" url: "https://longbridge.com/en/news/280278651.md" description: "Broadcom warns of a chip supply chain crisis, pointing out that Taiwan Semiconductor's capacity has reached its peak, becoming a bottleneck for industry development. As the global AI arms race intensifies, the vulnerability of the supply chain has once again drawn attention. Broadcom stated that the capacity limitations of Taiwan Semiconductor affect the entire supply chain, and the energy and raw material supply pressures brought about by the Middle East conflict have increased uncertainty. Although Taiwan Semiconductor plans to expand capacity, it has already become a bottleneck by 2026, impacting multiple links in the technology industry chain" datetime: "2026-03-24T08:12:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/280278651.md) - [en](https://longbridge.com/en/news/280278651.md) - [zh-HK](https://longbridge.com/zh-HK/news/280278651.md) --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/280278651.md) | [繁體中文](https://longbridge.com/zh-HK/news/280278651.md) # Directly pointing to TSMC's production capacity "reaching its peak"! Broadcom publicly warns of a chip supply chain crisis, facing the biggest constraint in the AI arms race According to the Zhitong Finance APP, as the global AI arms race continues to heat up, the vulnerability of the chip supply chain has once again become a focal point. Chip design giant Broadcom (AVGO.US) recently publicly warned that the company is currently facing supply chain constraints, particularly highlighting the capacity limitations of its key foundry partner Taiwan Semiconductor (TSM.US), which has become a core bottleneck restricting the development of the entire industry. Meanwhile, the energy and raw material supply pressures brought about by conflicts in the Middle East have also added new uncertainties to the global semiconductor industry. **Capacity "from unlimited to limited": Broadcom points directly to Taiwan Semiconductor's bottleneck** Natarajan Ramachandran, Director of Product Marketing for Broadcom's Physical Layer Products Division, stated on Tuesday, "We have observed that Taiwan Semiconductor's capacity has reached its limit." He also mentioned that just a few years ago, he would describe Taiwan Semiconductor as having "unlimited capacity." "Taiwan Semiconductor plans to continue expanding capacity before 2027, but by 2026, its capacity has already become a bottleneck, even to the extent of choking the entire supply chain," Ramachandran said. As of the time of publication, Taiwan Semiconductor has not immediately responded to requests for comment. As a major foundry for high-end AI chips globally, Taiwan Semiconductor admitted in January this year that it was facing tight capacity, with the AI infrastructure construction boom significantly occupying its advanced process production lines. This largest wafer foundry in the world—whose major clients also include NVIDIA (NVDA.US) and Apple (AAPL.US)—stated at that time that it was working hard to narrow the supply-demand gap. Ramachandran further pointed out that the supply chain tension is not limited to the chip sector but has spread to multiple links in the technology industry chain. "Although there are currently many suppliers in the industry, there is a clear supply gap in the laser device sector," he stated, adding that printed circuit boards (PCBs) have also become an "unexpected" bottleneck. Ramachandran noted that PCB manufacturers in Taiwan and mainland China are facing capacity shortages, leading to extended product delivery cycles, but he did not disclose specific supplier names. To ensure stable production in the coming years, many customers are being forced to turn to long-term agreements. According to Ramachandran, many customers are currently signing capacity assurance contracts with suppliers lasting three to four years. This trend has also been confirmed by memory chip giant Samsung Electronics (SSNLF.US). Last week, Samsung stated that it is working with core customers to extend the duration of cooperation agreements to three to five years. This move reflects customers' demands for long-term supply chain security and demonstrates suppliers' desire to mitigate risks from market demand fluctuations. **Taiwan Semiconductor's 2nm capacity is in crisis; NVIDIA's next-generation AI chip platform may be forced to adjust its design** The capacity bottleneck at Taiwan Semiconductor is also evident in the cutting-edge 2nm process. Reports indicate that the capacity for Taiwan Semiconductor's 2nm process (including the subsequent A16 node) is severely insufficient, and even its largest customer, NVIDIA, may be forced to redesign its next-generation AI chip platform "Feynman." This platform was originally planned for release in 2028, aimed at replacing the current Vera Rubin architecture. If adjustments to the design are made due to capacity limitations, it may affect its performance targets, release timeline, and cost structure At the same time, tech giants like Meta (META.US) have also joined the competition for 2nm process capacity, further exacerbating the supply-demand imbalance, causing TSMC's advanced process order schedule to extend beyond 2028. The tight capacity also gives TSMC stronger pricing power. Reports indicate that TSMC's advanced processes will experience a price increase for four consecutive years. This means that chip design companies not only face supply shortages but also have to deal with rising manufacturing costs, which will ultimately be passed on to AI server manufacturers, cloud service providers, and even end enterprises, further driving up the deployment costs of AI infrastructure. **Geopolitical "Ghost": Middle East Warfare Threatens Energy and Material Lifelines** As the physical limits of manufacturing face challenges, geopolitical clouds add uncertainties to the supply chain. With the ongoing conflict in the Middle East, the global semiconductor industry is facing the risk of critical material shortages, with Taiwan particularly vulnerable due to its heavy reliance on external energy. Taiwan's chip manufacturing industry contributes about one-fifth of its economic output, but the entire ecosystem is highly dependent on imports. Approximately one-third of the world's helium is processed in Qatar, while key materials like sulfur come from oil and gas refining. More critically, Taiwan's energy supply is heavily reliant on the Middle East—97% of its energy needs are imported, with 37% of its liquefied natural gas (LNG) coming from the Middle East. TSMC's electricity consumption accounts for 10% of Taiwan's total power generation, and the advanced processes require high stability in power supply; even millisecond-level fluctuations can lead to wafer scrapping. Goldman Sachs analyst team warns that commercial shipping through the Strait of Hormuz remains severely disrupted, and Qatar has declared force majeure. For Taiwan, the key risks are not only oil prices but also the actual availability, pricing, and delivery times of natural gas. Although Taiwan's economic authorities have stated that they have secured LNG supplies for March and April and that local companies can source helium from multiple suppliers like the U.S. and Australia, the potential for soaring electricity costs and material shortages due to prolonged conflicts remains a sword of Damocles hanging over TSMC. Shawn Kim, head of Asian technology research at Morgan Stanley, pointed out that while disruptions in the Strait of Hormuz may not immediately halt chip production, they will impact electricity costs, material supplies, and the economic viability of building AI infrastructure. He added that companies constructing large data centers and other energy-intensive facilities may face rising operational costs and sluggish revenues ### Related Stocks - [Defiance Daily Target 2X Long AVGO ETF (AVGX.US)](https://longbridge.com/en/quote/AVGX.US.md) - [Broadcom Inc. 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