TSMC on Tuesday held a board meeting where it, among other things, approved plans to spend $44.962 billion on building new fabs and upgrading existing production capacities. The approval is a part of the company's general plan to spend between $52 billion and $56 billion on capital expenditures this year, with the rest of the funding to be approved at a later meeting. In addition, the company promoted a developer of its 1nm-class process technology.
A record spending approval
TSMC holds board meetings — where it approves things like capital appropriations, capital injections, or distribution of dividends — every quarter. However, the company usually attempts to approve its CapEx appropriations more or less evenly throughout the years. For example, last year the board approved spending of $17.141 billion in Q1, $15.247 billion in Q2, $20.657 billion in Q3, and $14.981 billion in Q4, with some of the funds to be spent in 2026 or even later. Approval of a plan to spend $44.962 billion is a record one and indicates that the company is getting more aggressive with its expansion, as well as its projects getting more costly, which is in line with the general industrial trend for fabs to get more expensive.
It should be noted that approvals of capital appropriations are not indicators of actual spending, but these are allowances for management to spend them on certain projects, which may or may not be parts of the ongoing fiscal year's CapEx. Yet, as TSMC's CapEx budgets are increasing year-over-year, so are capital appropriations.
Earlier this year, TSMC announced plans to spend between $52 billion and $56 billion on all-new manufacturing capacities, upgrading existing fabs, and building advanced packaging facilities. The contract chipmaker plans to spend between 70% and 80% of its 2026 CapEx on advanced process technologies, between 10% and 20% of the budget on advanced packaging and mask making, as well as approximately 10% on specialty technologies.
Accelerated spending on advanced fabs is designed to make TSMC unbeatable to Intel and Samsung Foundry when it comes to availability of the state-of-the-art production capacities. If the company has considerably more capacity than its rivals, it will be more likely to land big orders from big customers. If TSMC has slightly more capacity than its clients need, then the latter will unlikely outsource even a part of their production to competitors.
Lead A10 developer gets promoted
Another notable happening at the meeting is the promotion of S.S. Lin — who is currently senior director at TSMC's research and development organization responsible for the development of the company's A10 process technologies (1nm-class) — to a vice president status.
The promotion is likely a sign that the upper management is satisfied with where the A10 platform development is going and the preliminary results that have been achieved so far. The promotion may also mean that as a VP, S.S. Lin will be able to oversee more technology programs than a single (yet very important) process node as well as have greater influence over roadmap goals, priorities, and resource allocation, though we are speculating. Also, as the A10 program is moving from research and development towards finalization and adoption by partners and customers, the program leader may need to have more power to execute their goals.
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