U.S. hyperscalers started the year planning to spend over $700 billion on new data centers. Three months later, three of the four major players increased their capital expenditure budgets during their first-quarter earnings reports.
The expanding infrastructure budgets pushed Nvidia higher, adding $591 billion in market capitalization over a four-day stretch.
The sustained hardware spending prompted Taiwan Semiconductor Manufacturing to raise its 2026 revenue growth outlook to exceed 30%. The contract chipmaker also adjusted several long-term industry projections:
- The total semiconductor market will reach $1.5 trillion by 2030, up from a previous $1 trillion estimate.
- High-performance chips will capture 55% of that total, representing $825 billion in spending.
- The manufacturer will push its own capital expenditures to the high end of its $52 billion to $56 billion range this year.
Physical limits
The surge in orders is testing the physical supply chain. TSMC is facing capacity constraints on its CoWoS advanced packaging, which combines logic chips with memory to lower data-transfer latency.
Those bottlenecks are pushing some immediate packaging demand to Intel, while TSMC aims to scale up its next-generation N2 manufacturing process.
