Zeng Guanwei, senior semiconductor research manager of IDC, said that the possibility of AI foam bursting next year is very small, because the world's major cloud service providers (CSPs) plan to continue to invest heavily in AI infrastructure construction in the next two years. Zeng Guanwei said, "The risk of this situation happening in 2026 is very low. The deployment of artificial intelligence infrastructure is limited by energy supply." The eight major CSP manufacturers in the world are Google, Amazon AWS, Meta, Microsoft, Oracle, Alibaba, Tencent, and Baidu. Taking Google as an example, it has raised its capital expenditure for 2025 to $91-93 billion to cope with the surge in demand for AI data centers and cloud computing; Meta has also raised its capital expenditures to $70-72 billion in 2025 and expects a 65% year-on-year increase in capital expenditures to $118 billion in 2026; AWS will increase its capital expenditure to $125 billion in 2025; Although Microsoft has not disclosed the complete amount of capital expenditures for the fiscal year 2025, it is expected that the capital expenditures for the fiscal year 2026 will be higher than those for the fiscal year 2025. Zeng Guanwei stated that CSP companies will consider the availability of energy resources before placing orders, and added that they will not waste money on chips. Wafer foundry service providers are expected to grow by 20% year-on-year next year, surpassing the growth rate of the entire semiconductor industry and becoming one of the biggest beneficiaries of the artificial intelligence boom. TSMC, the world's largest chip foundry and Nvidia's main chip supplier, expects its revenue to grow by 22% to 26% next year. In order to cope with the strong demand for AI chips, TSMC is expected to increase its capital expenditure to US $48 billion to US $50 billion next year, mainly for improving the 3nm, 2nm and advanced chip packaging capacity in Taiwan, China and the United States. This will increase TSMC's capital expenditure budget of $40 billion to $42 billion this year by 20%. IDC stated that in order to alleviate supply constraints, TSMC may significantly expand its advanced chip packaging (CoWoS) capacity next year, with an increase of over 66%, from 660000 wafers this year to 1.1 million wafers per year. But the company stated that this cannot completely solve the supply shortage problem, as it is expected that more than half of CoWoS production capacity will be consumed by Nvidia. It is expected that the increasing geopolitical risks will promote major changes in the pattern of wafer foundry. By 2029, Chinese Mainland will surpass Taiwan, China to become the world's largest wafer foundry service provider. At that time, the market share of China's wafer foundry is expected to expand to 37%, thanks to the strong subsidies provided by the Chinese government to the chip industry, aimed at increasing semiconductor self-sufficiency. He also added that it is expected that the production capacity of Chinese chip manufacturers will achieve a compound annual growth rate of 9.8% between 2025 and 2029, mainly focused on mature process technologies. IDC said that as local chip manufacturers in Taiwan, China diversify their production to overseas markets such as the United States, Japan and Europe, Taiwan, China is expected to account for 35% of the market share and 2.8% of the capacity growth. Over the past two years, TSMC has received approximately NT $147 billion (US $4.71 billion) in subsidies from the governments of the United States, Japan, Germany, and China for global expansion. According to financial data compiled by the world's largest chip foundry manufacturer, the company received NT $4.77 billion in subsidies from these governments in the third quarter of this year, bringing the total subsidy amount for the first three quarters of 2025 to approximately NT $71.9 billion. According to data, TSMC received a financial aid of NT $75.16 billion in 2024, and with subsidies received in the past two years, the chip manufacturer received a total of NT $147 billion in subsidies. According to TSMC, the subsidies received by its subsidiaries - TSMC Arizona in Arizona, USA, ESMC in Dresden, Germany, JASM in Kumamoto, Japan, and TSMC Nanjing in China - are mainly used to purchase real estate, facilities, and equipment. In addition, TSMC stated that these funds are also used to pay for operational costs and expenses related to these overseas production bases. It is reported that TSMC is facing challenges such as complex regulations, insufficient manpower, and high costs in the United States in Phoenix. TSMC only needs a single permission from the authorities to build a factory in Taiwan, China, China, but it has to face multiple levels of laws and regulations at the municipal, county, state and federal levels in Arizona. It is often subject to thousands of approvals, and even forced to formulate 18000 regulations by itself, costing 35 million dollars. Although Phoenix has vast land and few natural climate disasters, its biggest challenge is water scarcity. TSMC has committed to building wastewater treatment plants with the goal of recycling almost all water used. In addition, chip manufacturing requires high-precision equipment and skilled personnel. TSMC introduced more than 500 Taiwan, China technicians two years ago, which caused opposition from the US trade union.