TSMC Approves $40.93 Billion Capital Budget, Raises Dividend and Plans OpenAI and Anthropic Investments

Factory expansion leads a wider investment push

Taiwan Semiconductor Manufacturing Co. approved a US$40.9267 billion capital budget on November 10, 2026, covering chip production, advanced packaging, factory construction and research spending for 2027. The authorization is worth about NT$1.345 trillion and forms part of the company's planning for customer demand over several years.

The board also approved investments of up to US$500 million each in artificial intelligence companies Anthropic and OpenAI Group PBC, alongside up to US$500 million to establish an investment company focused on the semiconductor industry and related businesses.

TSMC said strong customer demand, including demand associated with agentic AI, supports expected capital expenditure of US$60 billion to US$64 billion for 2026. Agentic AI refers to systems designed to carry out tasks through several steps, such as planning an activity, using software tools and responding to the results.

The company expects capital spending during 2026 through 2028 to rise substantially compared with the preceding three years. Its board decisions connect that manufacturing expansion with investments in AI businesses and a larger cash payment to shareholders.

Shareholders will receive a third quarter dividend of NT$9 per ordinary share, up from NT$7 for the previous quarter. The payment is scheduled for April 8, 2027, following third quarter revenue of NT$1.49424 trillion and net profit of NT$763.06 billion.

What the capital budget will pay for

The US$40.9267 billion authorization covers several stages of semiconductor production. TSMC plans to install and upgrade advanced manufacturing capacity, expand advanced packaging, and build or improve capacity using mature and specialty manufacturing processes.

Advanced manufacturing creates the circuits inside chips. Packaging connects the resulting pieces of silicon to other components and provides the electrical connections needed for them to function in a device or computing system. Expanding both helps customers move from a chip design to a usable product.

Mature and specialty processes serve a different set of manufacturing needs from the newest chip technologies. Their inclusion shows that the approved budget reaches beyond the most advanced processors and supports a broader range of customer products.

Factory construction and facility engineering are also included. A semiconductor factory requires much more than production machines: it needs tightly controlled operating conditions and dependable supporting systems before equipment can manufacture chips reliably.

The authorization also includes 2027 research and development capital spending, recurring capital expenditure and capitalized leased assets. Capitalized leased assets are assets obtained through leasing arrangements that are recorded on the company's balance sheet. The board gave no breakdown of the budget by category, country or individual factory.

How the approval fits the annual spending plan

TSMC described the approval as part of its regular process for authorizing capital budgets under a longer investment plan. That plan draws on forecasts of customer demand and a technology development road map, which sets out the manufacturing capabilities the company intends to build.

The US$40.9267 billion authorization and the US$60 billion to US$64 billion forecast measure different things. The first is a board approval covering specified investments, including research capital spending for 2027. The second is the company's estimate of capital expenditure during the 2026 calendar year.

For readers following the investment cycle, the useful comparison is between annual spending forecasts. During its April earnings call, TSMC expected 2026 spending to approach the upper end of a US$52 billion to US$56 billion range, as described in the company's advanced packaging expansion. The latest range is US$8 billion higher at both ends.

The midpoint has risen from US$54 billion to US$62 billion, an increase of about 14.8%. TSMC's statement that investment during 2026 through 2028 will substantially exceed the previous three years extends that spending outlook beyond a single annual budget.

Why packaging matters alongside new chip factories

AI computing demand creates pressure at more than one stage of production. Making more processor chips increases the need for packaging capacity that can connect those processors with memory and other components.

TSMC's earlier packaging plans illustrate the scale of that work. Its Chip on Wafer on Substrate technology, known as CoWoS, places computing chips and high bandwidth memory close together. High bandwidth memory moves large amounts of data quickly, helping processors spend more time calculating and less time waiting for information.

The company has set out packaging platform targets capable of integrating 20 high bandwidth memory components in 2028 and 24 in 2029. Those targets connect the current expansion of manufacturing capacity with customer systems that will require larger and more complex packages.

For chip designers, access to fabrication and packaging needs to advance together. A processor made on schedule still needs the appropriate assembly capacity before it can become part of a finished AI computing product. Funding both stages addresses two linked production requirements.

Tainan shows the longer factory timetable

TSMC's planned expansion in Tainan provides a concrete example of the investment horizon behind the new budget. Chairman and Chief Executive C. C. Wei announced on October 15 that another factory using the company's 3 nanometer process would begin commercial production in the first half of 2028.

That project follows another Tainan facility expected to enter mass production in the first half of 2027. The additional Tainan factory reflects continuing customer demand for 3nm manufacturing even as TSMC develops newer processes.

The term 3nm identifies a generation of semiconductor manufacturing technology. Customers design products around particular processes, so demand for an established advanced generation can continue while a newer one enters production.

Tainan's government has said it will support water, electricity, public facilities and administrative work for construction. Those commitments show why a capital budget must cover buildings and supporting infrastructure as well as the machines that make chips.

TSMC is also converting some equipment used for 5nm manufacturing in Taiwan to support 3nm production. Its capacity strategy therefore combines new factories with changes to existing production resources, allowing different investments to support customer schedules.

Up to $1 billion for two AI companies

The board authorized up to US$500 million to subscribe for ordinary shares in Anthropic, PBC. The subscription price will be determined by the company's initial public offering price. An initial public offering, or IPO, is the process through which a company first offers shares to public investors.

A further authorization allows TSMC to subscribe for up to US$500 million of preferred shares in OpenAI Group PBC. Preferred shares are a different class of ownership from ordinary shares and can carry different financial or voting rights, depending on their terms.

Together, the two authorizations permit a maximum investment of US$1 billion. These are approvals to subscribe for shares; the amounts ultimately invested and the completion dates have not been announced.

The decisions add an ownership element to TSMC's involvement in the AI industry. Its manufacturing budget supports the physical production needed by customers, while the proposed share subscriptions would give it financial stakes in two companies developing AI systems.

The board announcement specifies the pricing mechanism for Anthropic's ordinary shares and the share class for OpenAI. Those details give investors a clearer picture of the proposed transactions while leaving their final size dependent on execution.

A separate vehicle for semiconductor investments

TSMC also approved up to US$500 million to establish an investment company for strategic investments in the semiconductor industry and its related business network.

The investment company is a separate authorization from the two proposed AI share subscriptions. Across all three decisions, the board approved funding ceilings totaling US$1.5 billion.

The stated remit gives the new company a broader semiconductor focus than either of the named AI investments. Businesses connected to semiconductor production can include those supplying the technologies and services that chipmakers need, although TSMC did not identify individual investment targets.

For shareholders, the board decisions set out three distinct uses of money: physical manufacturing and research assets, ownership stakes in AI developers, and an investment company for opportunities across the semiconductor industry. Each serves a different part of TSMC's expansion strategy.

Higher profits support a larger shareholder payment

TSMC's board approved third quarter consolidated revenue of approximately NT$1.49424 trillion, net profit after tax of NT$763.06 billion and earnings per share of NT$29.43.

Net profit represented about 51.1% of revenue, calculated from those figures. Put simply, TSMC earned roughly NT$51 in profit after tax for every NT$100 in sales during the quarter.

The NT$9 dividend is NT$2 higher than the preceding quarterly payment of NT$7, an increase of about 28.6%. It amounts to approximately 30.6% of the quarter's NT$29.43 earnings per share.

That combination gives shareholders a larger cash distribution while TSMC continues to plan substantial factory and research investment. The dividend and capital authorizations address different demands on the company's finances: paying owners from earnings and building production capabilities for future customer orders.

For holders of ordinary shares, the payment will follow a March eligibility timetable. Holders of American depositary receipts, or ADRs, which represent shares traded in the United States, have their own record date within the same distribution schedule.

The dates investors and customers can follow

TSMC's announcements stretch from the November board meeting into factory production scheduled for 2028. Shareholders have specific dividend dates to follow, while customers have a longer manufacturing timetable.

• November 10, 2026: The board approves the capital budget, third quarter financial statements, dividend and investment authorizations.
• March 11, 2027: Ordinary shares trade without entitlement to this dividend. The ADR ex dividend date and record date also fall on March 11.
• March 13 to March 17, 2027: Transfers of ordinary shares are suspended for the dividend record process.
• March 17, 2027: The ordinary share dividend record date determines the registered holders entitled to payment.
• April 8, 2027: The cash dividend is scheduled to be paid.
• First half of 2027: An earlier Tainan 3nm expansion is expected to begin mass production.
• First half of 2028: The additional Tainan 3nm factory is scheduled to begin commercial production.

The ex dividend date is the first trading day when a buyer of the shares no longer receives the upcoming payment. The record date is the date used to identify the registered shareholders entitled to it.

For manufacturing customers, the main development is the breadth of the spending commitment. TSMC is funding advanced chipmaking, packaging, established processes, factory infrastructure and research together, with customer demand over several years guiding the plan.

Key Points

• TSMC approved a US$40.9267 billion capital budget covering manufacturing, packaging, factories and research capital spending for 2027.
• The company expects 2026 capital expenditure of US$60 billion to US$64 billion and substantially higher investment during 2026 through 2028 than in the preceding three years.
• The board authorized up to US$500 million each for Anthropic ordinary shares and OpenAI preferred shares.
• A separate investment company may receive up to US$500 million for semiconductor industry investments.
• Third quarter revenue reached NT$1.49424 trillion, with net profit of NT$763.06 billion and earnings per share of NT$29.43.
• The quarterly dividend rises from NT$7 to NT$9 per ordinary share, with payment scheduled for April 8, 2027.