Taiwan Semiconductor Manufacturing Co has expanded its investment in US chipmaking capacity, bringing the total planned amount to $265 billion.
The chipmaker has earmarked another four fabrication plants as part of the $100 billion package, bringing TSMC’s total US capacity to 10 factories and two packaging facilities. The expansion comes as AI demand continues to stretch TSMC’s capacity, with the company reporting record quarterly profits and raising its capital expenditure forecast to between $60 billion and $64 billion.
It comes five months after TSMC announced its first $100 billion investment increase, committing the company to building three additional fabrication plants, two packaging facilities, and a research lab in Phoenix, Arizona. The four new sites announced on Thursday will also be based at its North Phoenix facility.
Only one Arizona fab is currently operational, producing 4nm chips, meaning much of the $265 billion investment is still years away.
Geopolitical tensions push TSMC beyond Taiwan
TSMC, with some prodding from the US government, has made more significant investments over the past two years to expand its presence outside Taiwan. Given TSMC’s overwhelming influence on chip production, having multiple bases of operation would reduce the damage an earthquake or conflict with China could cause across the industry.
While TSMC and the Taiwanese government were previously hesitant to move leading-edge production outside the country, geopolitical pressure from China and the threat of US tariffs have forced it to branch out. It aims to begin 3nm production in Arizona in the second half of 2027, followed by 2nm, its current leading-edge process, by the end of the decade.
It was circling Intel earlier in the year, with a potential takeover bid alongside Broadcom reportedly under consideration. The deal would have seen the two companies split Intel’s design and manufacturing operations, but it appears to have fizzled out as Intel’s stock price rose dramatically over the past few months.
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US expansion could ease supply concerns
Another reason for TSMC to increase its US investment is uncertainty among some of its major customers, including Apple.
The iPhone maker has reportedly been working with Intel on a new chip deal that would see Apple’s custom silicon manufactured at Intel foundries. Expanding its US operations could allay some of these concerns and establish TSMC as the country’s leading chip manufacturer.
Even though TSMC has a huge backlog due to soaring AI chip demand, growth is expected to slow over the next few years as more data centers enter the operational stage. When that happens, TSMC will need to remain the first choice for consumer electronics companies launching new devices every year.
For electronics consumers and AI users, a more geographically diverse TSMC could mean a steadier supply of chips for smartphones and data centers.
For more on how major tech companies are expanding AI infrastructure across the Asia-Pacific region, read our coverage of Samsung’s planned data center investment in New Zealand.