Supply Chain Bottleneck | Broadcom: TSMC's Capacity Will Reach Its Limit

SighingCashier · 2026-03-24T09:08:42+00:00

Chip design company Broadcom points out that supply chain bottlenecks are affecting the tech industry due to production capacity constraints from manufacturing partners like TSMC. Surging demand for AI chips has led to shortages across various tech supply chains, particularly in the laser and printed circuit board sectors. Customers are seeking long-term agreements to secure future production capacity.

SighingCashier

2026-03-24 09:08:42

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Chip design company Broadcom states that it is facing supply chain bottlenecks, including capacity constraints from manufacturing partner TSMC, highlighting the ripple effects of the surge in demand for AI chips across the tech industry.

According to Reuters, Natarajan Ramachandran, Vice President of Product Marketing for Broadcom’s Physical Layer Products division, said that a few years ago, he would describe TSMC’s capacity as unlimited, but now he sees TSMC gradually reaching its limits. Although TSMC plans to continue expanding capacity before 2027, the current supply shortages have become a bottleneck and could disrupt the supply chain as early as 2026.

As a leading global manufacturer of advanced AI chips, TSMC in January this year reported capacity constraints due to the boom in AI infrastructure development occupying most of its advanced production lines.

Ramachandran stated that supply bottlenecks have extended from chips to various parts of the tech supply chain. While many suppliers exist in the industry today, there are indeed bottlenecks in the laser sector, and he added that printed circuit boards (PCBs) have also become an unexpected bottleneck. PCB suppliers in Taiwan and mainland China are facing capacity limitations, leading to extended delivery times.

He also mentioned that many customers are currently signing long-term agreements with suppliers to secure capacity commitments for up to 3 to 4 years.

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