Gate News message, April 17 — TSMC and ASML’s strong outlooks this week indicate that Microsoft, Meta, and Amazon will maintain substantial spending on AI chips and data centers in the coming quarter. TSMC announced plans to increase capital expenditure to expand its constrained production capacity, while ASML raised its annual revenue forecast and indicated that demand is expected to remain above supply levels.
Data center spending is projected to exceed $600 billion this year. The four major hyperscalers—Microsoft, Meta, Alphabet, and Amazon—are forecast to spend nearly $700 billion on capital expenditure in 2026, a figure comparable to Sweden’s entire economy. The signals point to sustained demand for chip designers including Nvidia, AMD, and Broadcom, even as investors press big tech firms to demonstrate clearer returns on AI investments.
Capacity constraints are driving the trend. To secure scarce chip supply, some cloud computing and AI infrastructure buyers are entering take-or-pay contracts, which mandate payment for minimum semiconductor wafer quantities regardless of usage. For chipmaking equipment and semiconductor suppliers, such agreements provide greater visibility into orders and steadier cash flows, supporting capacity expansion efforts.
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