Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract chipmaker, announced a substantial increase in its US investment, committing an additional $100 billion to expand its advanced semiconductor manufacturing operations in Arizona. This brings TSMC's total investment in the US to $165 billion. The investment will fund three new fabrication plants, two advanced packaging facilities, and a major research and design (R&D) center, effectively doubling its planned US manufacturing plants from three to six.
The announcement was made by former US President Donald Trump alongside TSMC CEO C.C. Wei, who hailed it as the largest single foreign direct investment in US history. President Trump emphasized that this investment would ensure the production of the world's most powerful AI chips in America and create tens of thousands of construction and engineering jobs, strengthening the domestic semiconductor ecosystem and AI supply chain. This move is seen as a way for TSMC to potentially avert steep tariffs previously threatened by Trump on imported chips.
The first of TSMC's Arizona fabs began high-volume production of 4nm chips, used in advanced GPUs, earlier this year. The second fab is slated to produce 2nm and 3nm chips by 2028, with the third, expected by the end of the decade, also producing 2nm chips and more advanced technologies. While President Trump criticized the CHIPS and Science Act, which provided TSMC with $6.6 billion in direct funding and $5 billion in low-cost loans for its first Arizona foundry, this new investment aligns with US efforts to reshore manufacturing and reduce reliance on foreign chip production.
Simultaneously with this announcement, a US-Taiwan trade deal was signed, capping US tariffs on Taiwanese goods at 15%, down from 20%, without adding to existing rates. This suggests a favorable environment for TSMC's enhanced presence in the US. TSMC's CFO, Wendell Huang, indicated that capital expenditure in the US would continue to rise to meet the growing demand for artificial intelligence chips, signaling ongoing expansion beyond the current commitments.
