With TSMC's plan for a sharp expansion of leading-edge process capacity next year now public, forecasts have emerged that revenue will again set a record high.

Leading-edge refers to the newest generation of processes with the finest circuit line widths. Artificial intelligence accelerators and high-performance mobile chips are the main sources of demand.

Capacity expansion proceeds together with equipment orders, cleanroom construction and hiring. More than a year typically passes between announcement and actual volume production.

The plan also affects order books at back-end and materials suppliers. Easing bottlenecks in packaging and testing has been cited as an industry issue in recent years.

Expanded capacity does not translate immediately into better profitability, however. Depreciation costs come first, and the effect appears only once utilization reaches a certain level.

Views on the demand outlook diverge, with expectations that AI investment will continue set against caution that the pace of investment may be adjusted.

The relationship with Korean chipmakers mixes competition and cooperation, since demand curves for memory and foundry do not necessarily move in the same direction. (Source: Taiwanese press reports)