Taiwan markets could benefit from Nvidia and TSMC expansions, experts say

As Nvidia’s CEO Jensen Huang forecasts a historic expansion in TSMC’s capacity to meet runaway AI demand, Taiwan’s semiconductor ecosystem is emerging not only as a production linchpin, but also as a strategic and economic anchor with far-reaching implications for talent, resilience and global supply chains.

TSMC capacity to double, Jensen Huang predicts

Taiwan’s semiconductor supply chain, led by Taiwan Semiconductor Manufacturing Company (TSMC), remains indispensable to Nvidia’s ambitions. TSMC, the world’s largest contract chipmaker, continues to scale capacity amid surging AI demand, with capital expenditures projected to reach up to US$56 billion in 2026, according to the company’s own estimates.

During Nvidia CEO Jensen Huang’s visit to Taiwan this January, he publicly lauded TSMC and other manufacturers at a high-profile industry dinner dubbed the “Trillion-dollar Dinner” by local media, emphasizing that Nvidia could not meet global demand without Taiwan’s technology ecosystem, per Yahoo.

He further suggested that TSMC could more than double its capacity over the next decade to keep pace with orders for advanced chips. He described the trajectory as the largest infrastructure build-out and capacity expansion in human history. Nvidia’s own demand alone, he noted, would more than double over that period.

Historically, Huang said, global semiconductor supply tended to scale at a roughly multiplicative annual pace. The rise of AI, however, has accelerated demand far beyond the industry’s traditional adjustment cycle.

Huang concluded that as a result, tightness is now evident across the entire semiconductor value chain: From chip design and advanced process manufacturing to packaging and memory, leaving virtually no segment untouched this year.

Huang said Nvidia has already moved its Grace Blackwell architecture into full-scale mass production, while simultaneously initiating development of its next-generation platform, Vera Rubin.

The latter, he explained, integrates six of the world’s most advanced chips into a single system, posing formidable challenges not only in process technology but also in system integration, manufacturing yield and advanced packaging while placing harsher demands on foundries.

He singled out Taiwanese firms for their engineering depth, manufacturing discipline and execution capability, emphasizing that TSMC’s role in advanced process technology and high-volume production remains irreplaceable.

Nvidia’s appetite for wafers this year, Huang added, is exceptionally strong, requiring TSMC to work extremely hard to meet rising demand.

According to statistics disclosed by TSMC, the company reported January revenue of NT$401.255 billion (around US$12.74 billion), surpassing the NT$400 billion threshold for the first time. Sales rose 19.8 percent month-on-month and 36.8 percent year-on-year, as robust AI demand continued to drive growth.

Yeang Cheng-ling (楊政齡), Chief Investment Officer of North Asia at DBS, said at a DBS luncheon on Feb. 5 that the current wave of investment by global tech giants does not constitute a speculative bubble. Instead, he said it on balance represents a net positive for the broader global economy.

He elaborated that unlike the dot-com era of the early 2000s, today’s leading tech firms are characterized by stable profitability and sustained earnings growth. In many cases, their operating cash flow significantly exceeds capital expenditures, he added.

Nvidia’s expansion benefits markets in Taiwan, experts say

According to Taiwan’s government, Huang also underscored Nvidia’s growing footprint in Taiwan’s labor market, noting that the company is aggressively recruiting engineers as its supply chain expands in scale and complexity.

The hiring reflects not only rising production volumes but also the diversification of Nvidia’s product portfolio. While Nvidia was once narrowly focused on graphics processing units, Huang said, the company now designs and delivers central processing units, networking chips, switches and a broad array of highly integrated systems, significantly increasing its technological scope.

Samuel Straw, head of research at the Taipei-based NGO Taiwan Digital Diplomacy Association, told TCN that more investment and revenue in Taiwan’s markets would attract more talent, something he said could strengthen Taiwan’s overall resilience.

He argued that in terms of resilience, the expansion of these tech companies is broadly good news for Taiwan. Deeper integration with global giants strengthens Taiwan’s strategic relevance and adds another layer to what people often call the “silicon shield,” he said.

Asked how such developments affect Taiwan’s labor market, he stated that Taiwan’s semiconductor ecosystem, now supercharged by AI, obviously makes it more deeply embedded in global markets and definitely puts Taiwan on the map when it comes to job search in certain spheres.

However, he cautioned, it does not mean that Nvidia’s expansion or a new headquarters in Taiwan will suddenly make the island broadly attractive to the global talent pool. He said that these are highly specialized industries. The kind of technical talent Nvidia needs doesn’t translate to most international professionals.

He suggested that for a niche group of highly tech-savvy global talents who enjoy Asian cuisines and lifestyle, Taiwan can feel like heaven on earth. For others, the news is unlikely to significantly change how global talents perceive Taiwan.

On the other hand, former head of AI Research Center at National Taiwan University of Science and Technology (NTUST), professor Chang Shun-chiao (張順教), said that sustained capacity expansion by leading US tech firms and other domestic champions such as TSMC, would be unequivocally positive for Taiwan’s talent pool.

He said compensation would increasingly be benchmarked to international standards, adding that wages paid by Taiwanese companies in the past had been structurally too low from a global perspective, which limited the island’s ability to retain and attract talent.

He added that higher-value investment could also improve Taiwanese workers’ global outlook, international mobility and self-efficacy.

The impact of higher-value investment, he said, would not be confined to engineers or science and technology graduates. Students trained in business, management and related disciplines would also stand to benefit as multinational operations expand and demand a broader range of professional skills.

Chang noted that during his academic career he has consistently worked to strengthen the leadership capabilities and English proficiency of Taiwanese business students, with the explicit goal of enabling them to compete in an increasingly international labor market.

While acknowledging that the government would naturally welcome expanded foreign investment, he cautioned policymakers against relying on slogans or superficial achievements to claim credit. Instead, he said, authorities must focus on tangible, implementation-driven measures that deliver real support to the industry.