Ben Thompson: TSMC's Underinvestment Locks In Compute Scarcity Through 2028

TSMC aggressively expanded capacity for the 5G wave in 2020-2022, then throttled growth through 2023, 2024, and 2025, just as AI demand accelerated. Stratechery's Ben Thompson said on the "Invest Like the Best" podcast with host Patrick O'Shaughnessy that this gap explains why compute is likely to remain scarce through 2028.
Thompson traced the pattern to the historical memory boom-bust cycle, in which Samsung's countercyclical investment broke Japanese memory makers and left a disciplined three-player oligopoly. He said TSMC repeated that conservative instinct, throttling capacity growth through 2023-2025 and only beginning to discuss AI use cases on earnings calls in the past one to two quarters. Because fab lead times are longer than data-center lead times, he said today's shortage is a lagging effect of that underinvestment and will likely worsen before it eases.
SemiAnalysis' Dylan Patel has made a similar case on fab lead times, arguing the compute shortage is structurally locked in for years rather than a near-term supply issue. The dynamic is seen as bullish for TSMC, Samsung, and Intel pricing power in the near term, while also setting up the risk of another boom-bust cycle once the delayed supply eventually arrives.