TSMC’s Arizona chip expansion isn’t done after U.S. investment: CFO
U.S. President Donald Trump (R) and C.C. Wei, chief executive officer of Taiwan Semiconductor Manufacturing Co. (L), shake hands during an announcement of an additional $100 billion in US production from TSMC at the White House on March 3, 2025 in Washington, DC, USA.
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Buoyed by another blockbuster earnings report and a new U.S.-Taiwan trade deal Taiwan Semiconductor Manufacturing Inc. It is preparing to accelerate its multibillion-dollar expansion in Arizona.
The world’s largest contract chip maker has already committed $165 billion in the United States, in line with Washington’s effort to rebuild domestic chip production. However, TSMC executives signaled that spending will increase further as the company increases its capacity to meet demand for artificial intelligence chips.
Speaking with CNBC’s Emily Tan on Thursday, TSMC Chief Financial Officer Wendell Huang said the firm will continue to increase its investments in Arizona.
“We have a strong belief in the megatrend of artificial intelligence, and therefore we are increasing capital expenditure to expand in Taiwan and the United States,” Huang said. “Try to accelerate not only to expand, but also where it is possible to fill or narrow the gap“
The comments came just hours after Chief Executive CC Wei said on the company’s quarterly earnings call that TSMC had recently purchased additional land in Arizona and plans to build a “gigafab cluster” in the state.
While the company did not disclose the dollar value of its planned U.S. expansions, it estimates capital expenditures in the new year will increase by more than 30% at the midpoint compared to 2025.
Trade deal timing
The expansion in Arizona coincides with the U.S.-Taiwan trade deal signed on Thursday; This agreement reduces US tariffs on Taiwanese goods from 20% to 15%, without increasing existing rates.
Under the agreement, Taiwanese companies commit to $250 billion in direct U.S. investment in semiconductors, artificial intelligence and related industries, as well as $250 billion in loan guarantees to strengthen their supply chains. The agreement also provides favorable treatment for chips and supports efforts to repatriate production to the United States
Shows our manufacturing excellence can be replicated in the USA
Wendell Huang
Chief Financial Officer, TSMC
Wall Street Journal ahead of TSMC’s earnings release and trade deal reported It was stated that the Taiwanese chip giant is planning a significant expansion in Arizona as part of trade negotiations between the USA and Taiwan, based on confidential sources.
But Huang on Thursday denied that U.S. investment plans are directly tied to those trade talks.
” [U.S.-Taiwan] “The trade agreement is between the two governments and we are not part of the discussions,” he said.
“But I will say this, we continue to invest and accelerate our investment in Arizona because of customer demand, and we’re actually making very good progress with our investments.” [first fab] He works and works in Arizona.
US progress
The expansion effort follows progress at the existing U.S. facility after years of delays and concerns.
TSMC’s first manufacturing facility to begin mass production is now producing chips with yield and technology levels comparable to the company’s leading facilities in Taiwan, according to executives.
“This shows that our manufacturing excellence can be replicated in the U.S. This means a lot to us, and it also means a lot to our customers,” Huang said.
Meanwhile, the company shifted the production timeline for its second Arizona facility to the second half of 2027, and construction of the third facility accelerated this year. The company also noted in its last earnings call that TSMC has applied for permits for a fourth facility.
TSMC’s original plan for 1,100 acres in Arizona included six wafer manufacturing facilities, two advanced packaging facilities and a research and development center, according to Huang.
However, this land was insufficient for expansion plans, which led to the purchase of an additional 900-decare land. Some facilities that were part of the original plan will now be built on this second piece of land, while the rest “will be used for future flexibilities,” Huang said.
TSMC shares were trading up more than 2% in Taipei on Friday.
