TSMC’s $165 billion U.S. chip expansion isn’t done, its CFO signals

Taiwan Semiconductor Manufacturing Company (TSMC) is set to ramp up its significant expansion efforts in Arizona, fueled by a strong earnings report and a new trade agreement between the U.S. and Taiwan. As the largest contract chipmaker globally, TSMC has already pledged $165 billion towards its U.S. operations, aligning with the U.S. government's initiative to bolster domestic chip manufacturing. In a recent discussion with CNBC, TSMC's Chief Financial Officer, Wendell Huang, emphasized the company's commitment to increasing investments in Arizona, driven by the burgeoning demand for artificial intelligence (AI) chips. "We have strong conviction on the AI mega trend, and that is the reason we are stepping up the capital expenditures to expand in Taiwan and in the U.S.," Huang stated. His remarks followed the company's announcement of acquiring additional land in Arizona to establish a "gigafab cluster." While specific financial figures for the upcoming expansions remain undisclosed, TSMC anticipates its capital expenditure for the next year will exceed 30% compared to 2025 estimates. This expansion coincides with a recently signed trade deal that reduces U.S. tariffs on Taiwanese goods and facilitates substantial investments from Taiwanese firms into the U.S. semiconductor and AI sectors. Despite speculation linking TSMC's expansion to trade negotiations, Huang clarified that their investment plans are driven by customer demand rather than direct trade discussions. "The trade deal is between two governments, and we are not part of the discussions. However, we are committed to investing in Arizona due to customer needs," he said. TSMC's efforts are bolstered by progress at its current Arizona facility, which has begun mass production, achieving chip yields and technology levels comparable to its top-tier plants in Taiwan. Huang remarked on the importance of this achievement, highlighting it as a milestone for both the company and its clients. Looking ahead, TSMC is accelerating the timeline for its second Arizona plant to late 2027 and has started construction on a third facility. The company is also applying for permits for a fourth plant, expanding its ambitious footprint in the region. Originally, TSMC planned to utilize 1,100 acres in Arizona for various manufacturing and R&D facilities, but the growing demands have prompted the acquisition of an additional 900 acres for future developments. As a result of these optimistic developments, TSMC's shares saw a rise of over 2% in Taipei trading on Friday.