Donald Trump and TSMC Chairman Wei Che-chia announce plans for new TSMC production facilities in the United States after a meeting at the White House in March last year. [Getty Images]
Donald Trump and TSMC Chairman Wei Che-chia announce plans for new TSMC production facilities in the United States after a meeting at the White House in March last year. [Getty Images]

TSMC, the world's largest contract chipmaker, said Monday it will expand its investment in its Arizona factories to $265 billion (397.5 trillion won).

The figure represents an addition of $100 billion to the previously announced Arizona investment. Chief Financial Officer Wendell Huang said the move is aimed at meeting strong demand from US customers and keeping rivals such as Intel at bay.

"We continue to see strong customer demand — multiyear structural demand," Huang told Bloomberg and Reuters in an interview Monday. "We are doing everything we can, everywhere we can, to support our customers' growth. We want to show that we have no intention of leaving food on the table for anyone else."

The remarks made clear that TSMC sees robust demand ahead in the United States and intends to widen its lead over competitors.

Huang said the Arizona investment represents the largest foreign direct investment in US history.

Earlier, TSMC Chairman Wei Che-chia said during the company's second-quarter earnings call Thursday that the additional $100 billion would fund the construction of four new factories. If the plan is fully realized, TSMC's Arizona campus would ultimately house 10 semiconductor fabrication plants, two packaging facilities and one research and development center.

The first factory at the Arizona complex is already in operation, producing yields comparable to TSMC's flagship plants in Taiwan. The second factory is set to begin receiving equipment soon. The third is under construction, while the fourth factory and the first advanced packaging facility remain in preliminary stages.

In a separate interview with CNBC, Huang said the first phase — a 4-nanometer process — is already running, and that the 2-nanometer process will be the next growth driver. "The 2-nanometer will grow bigger and bigger over the coming quarters," he said, adding that after generating its first revenue in the second quarter, the process will become a new revenue pillar starting in the third quarter.

According to the interviews, construction costs in the United States run four to five times higher than in Taiwan. TSMC acknowledged that expanding overseas operations would dilute initial profit margins but said the investment would ultimately benefit the development of the US semiconductor ecosystem. Huang said the additional $100 billion "will be used for both front-end wafer foundry and back-end advanced packaging facilities."

The expansion aligns with President Donald Trump's push to bring semiconductor production onshore. Trump has accused Taiwan of "stealing" America's chip business and has made building a domestic semiconductor supply chain a top priority, claiming the United States will hold 50 percent of global chip production capacity by the end of his term. The pressure has grown pointed enough that Commerce Secretary Howard Lutnick, attending a concrete-pouring ceremony at a Micron chip factory recently, openly said he wants Samsung Electronics and SK Hynix to come to the United States and build production facilities there.

Market reaction to the investment expansion was mixed. Chinese brokerage GF Securities downgraded TSMC after the earnings release, arguing that the acceleration of capital expenditure beginning only in 2025 — roughly 18 months to two years after the AI cycle took off — suggests a loss of market share or a shift in demand toward rivals. TSMC's Taiwan-listed shares fell 7.3 percent on Friday despite the record earnings.

Huang reiterated TSMC's longstanding position that even as it expands in the United States, the most advanced technologies will be mass-produced in Taiwan first. Next-generation chips require close collaboration between research and development teams and factories, he said, meaning overseas transfer can only be considered once a process is sufficiently stable after being proven in Taiwan. Seemingly mindful of criticism that it is tilting too heavily toward the United States, TSMC also said it plans to build 25 new factories in Taiwan over the next five years.


kate01@heraldcorp.com