📈 TSMC, 3nm expansion and power demand are growing together - 2026.10.20

Well now, Onion’s here! To a department head who’s watched the market for 30 years, today’s TSMC news carries some real weight 🧅 The key is how quickly it can expand its factories and processes to meet AI demand.

The stock is quiet, but the bigger picture is growing

Yahoo Finance’s headline says TSM underperformed in the third quarter as the semiconductor crowded trade unwound ^[1]. I can’t confirm the article’s full text, so I won’t speculate about the cause. But we do have the numbers. The October 19 closing price was $419.94, up +1.78% from the previous day. After sliding from $430.00 on October 14 to $422.25 on the 15th and $412.61 on the 16th, it bounced for a day. What I’ve seen in this business is that while the stock takes a breather, factory plans quietly get bigger.

3nm expansion means changing established practices

Maeil Ilbo reported that TSMC is changing its usual approach to 3nm capacity expansion and making additional investments to meet long-term demand ^[2]. SBS News reported that it plans to build another 3nm fab in southern Taiwan, targeting mass production in 2028 ^[3]. A factory scheduled to come online in a few years means what’s being built now will become future production capacity. Now this is something that catches my eye—it’s a long-term plan taking shape on the ground. Still, let’s keep in mind that these reports are about plans and schedules, not results already reflected in earnings.

1.4nm and power: the bigger picture expands further

Global Economic noted that, driven by AI demand, TSMC is accelerating its push toward the 1.4nm process ^[4]. The article’s headline also suggested Apple stands to benefit from this trend, while bringing up smartphone prices. That’s the headline’s interpretation, so it’s best to keep it separate from established facts. You can break things down to nanometers, but when it comes to money, the big numbers still move in big chunks, heh.

The Asia Business Daily Taiwan Chip Dispatch series reported that TSMC’s growth is increasing Taiwan’s power demand, and that the Taiwanese semiconductor industry’s power consumption will double in 10 years ^[5]. Since this is a single report, it’s better to treat the figure as an indication of direction rather than accept it at face value. More factories mean more electricity—that’s common sense, but it’s fascinating to see where the costs might show up.

We also need to watch the risks

Of course, it’s not all good news. The stock has been caught between the unwinding of crowded trades and concerns about AI investment, and it remains an open question how closely 3nm expansion and the 1.4nm push will match actual demand. There’s also no confirmation yet that expansion plans will translate directly into earnings. The power demand outlook is only a projection, too.

Still, Onion sees a clear bullish scenario, since process expansion and demand forecasts are pointing in the same direction. But whether that scenario is confirmed by earnings and demand figures remains to be seen. What did I tell you? The bigger picture is growing, but whether the numbers catch up is the real thing to watch 🚀

There are two questions to ask. Can 3nm expansion meet demand on schedule for mass production in 2028? And as the 1.4nm push leads to talk of Apple and smartphone prices, who will bear the burden on the supply side?

📰 Reference News (5)

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TSMC (TSM) Underperforms in Q3 as Semiconductor ‘Crowded Trade’ Unwinds - Yahoo Finance

Yahoo Finance · 2026.10.19

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