TSMC adds $100 billion to its US spending plan

Taiwan Semiconductor Manufacturing Company announced Thursday that it plans to spend an additional $100 billion on its United States operations.

The giant chipmaker, which makes chips designed by Nvidia, Apple and others, previously pledged to invest $165 billion to expand its operations near Phoenix. That brings the company’s total commitment to its fast-growing Arizona footprint to $265 billion.

The announcement, made during TSMC’s quarterly earnings presentation, is partly a response to growing political pressure on foreign semiconductor companies to locate factories in the United States. TSMC broke ground on its first factory in Arizona in 2021, during the Biden administration.

But the Trump administration has threatened trading partners with high tariffs unless they set up manufacturing operations in the United States that would bring money and jobs. Samsung Electronics has two chip plants in Texas, while SK Hynix, another major South Korean memory chip maker, is building a plant in Indiana.

TSMC’s new $100 billion commitment would include building four new chip factories, known as fabs, for the company’s contract manufacturing. That would be in addition to six semiconductor factories, two advanced chip packaging facilities and an R&D center in Arizona. The factories announced Thursday will most likely be located at a new 900-acre chip manufacturing campus the company purchased this year.

The investment would “bring advanced semiconductor manufacturing back to America,” said Howard Lutnick, the US Commerce Secretary. declaration published after TSMC’s announcement.

CC Wei, CEO of TSMC, said the pace of construction will depend on the “market situation”.

When asked about the construction schedule in the earnings call, Mr. Wei said: “We don’t have it today, but we have a plan. And we will try to speed it up as much as possible.”

Mr. Wei emphasized that TSMC is also expanding in Taiwan and Japan.

The factory building in America and elsewhere, Mr. Wei said, is mainly to respond to the rising demand for chips from the “AI megatrend,” as he put it.

Strong demand was reflected in the company’s second quarter results. Its sales rose to the equivalent of $40.2 billion, up 36 percent from a year earlier. Profit jumped nearly 80 percent to just over $22 billion in the quarter.

TSMC expects strong sales and profit growth this year and next. But on the call, TSMC executives repeatedly said their strategy was designed to meet long-term demand and advance its cutting-edge chipmaking technology. The company plans capital spending to reach $64 billion this year.

Xinyun Wu contributed reporting from Taipei, Taiwan.