As AI technology hurtles forward at a breakneck pace, TSMC, a pivotal player in the supply chain, finds itself grappling with an all-encompassing shortage of its 3nm advanced process production capacity. According to a report by J.P. Morgan analyst Gokul Hariharan, the surging demand from AI chip behemoths like NVIDIA has triggered an acute scarcity of TSMC's production capacity. In a bid to carve out a larger slice of the market pie, some clients are ready to shell out a premium of up to 100% and are urgently requesting TSMC to expedite production.

Despite TSMC's proactive efforts to ramp up production, such as retrofitting outdated production lines and fostering cross-factory collaborations, projections indicate that by the end of 2026, the monthly production capacity for 3nm will merely climb to 140,000 - 145,000 wafers. This figure falls far short of meeting the influx of orders. This yawning gap between supply and demand has ignited a frenzy among clients, who are now willing to pay exorbitant premiums. This trend could potentially propel TSMC's gross profit margin to soar beyond the 60% mark.