U.S. President Donald Trump (right) and Taiwan Semiconductor Manufacturing Co., Ltd. CEO CC Wei (left) shake hands at the announcement of TSMC’s additional $100 billion investment in U.S. manufacturing at the White House on March 3, 2025 in Washington, DC.
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Boosted by another blockbuster earnings report and a new trade deal between the US and Taiwan; Taiwan Semiconductor Manufacturing Co., Ltd. is poised to accelerate its multibillion-dollar expansion in Arizona.
The world’s largest contract chipmaker has already invested $165 billion in the United States, in line with Washington’s efforts to reshape domestic chip manufacturing. But TSMC executives have indicated that spending will increase further as the company expands production capacity to meet demand for artificial intelligence chips.
TSMC Chief Financial Officer Wendell Huang spoke with CNBC’s Emily Tan on Thursday and said the company will continue to increase its investment in Arizona.
“We have strong belief in the AI megatrend, which is why we are ramping up capital investment for expansion in Taiwan and the United States,” Huang said. “We will not just expand, but strive to accelerate where we can satisfy or narrow the gap.”
The comments came hours after CEO CC Wei said during the company’s quarterly earnings call that TSMC recently purchased additional land in Arizona and plans to build a “GigaFab cluster” in the state.
The company did not disclose the amount of its planned U.S. expansion, but said it expected capital spending in the new fiscal year to be more than 30% higher than in 2025 at the midpoint.
Timing of trade agreements
The expansion into Arizona coincides with the U.S.-Taiwan trade deal signed Thursday, which lowers the cap on U.S. tariffs on Taiwanese products from 20% to 15% with no additions to existing rates.
Under the agreement, Taiwanese companies will commit $250 billion in direct investment in the United States across semiconductors, AI and related fields, as well as $250 billion in credit guarantees to strengthen supply chains. The agreement also provides preferential treatment for chips and supports efforts to bring manufacturing back to the United States.
This shows that our superior manufacturing techniques can be replicated in the United States.
wendell fan
TSMC, Chief Financial Officer
U.S. Commerce Secretary Howard Lutnick told CNBC’s Brian Sullivan that the goal of the trade deal is to bring 40% of Taiwan’s semiconductor supply chain to the United States.
Ahead of TSMC’s earnings release and trade deal, The Wall Street Journal reported, citing confidential sources, that the Taiwanese semiconductor giant was planning a major expansion in Arizona as part of U.S.-Taiwan trade negotiations.
But Hwang denied on Thursday that U.S. investment plans were directly tied to these trade talks.
“The (U.S.-Taiwan) trade agreement is between the two governments, and we are not participating in the discussions,” he said.
“But what I want to say is that because of customer demand, we continue to invest in Arizona and accelerate our investment in Arizona, and (our first factory) in Arizona is up and running and we’re actually making very good progress.
american progress
The expansion efforts follow current progress at the U.S. facility after years of delays and concerns.
TSMC’s first manufacturing facility has already begun volume production and is producing chips at yields and technology levels comparable to the company’s main facility in Taiwan, executives said.
“This shows that our manufacturing excellence can be replicated in the United States. This means a lot to us and it means a lot to our customers,” Huang said.
However, he noted that the company’s cutting-edge technology will continue to be developed and scaled up in Taiwan, and TSMC will benefit from the necessary collaboration between its research teams and manufacturing operations.
Profit margins in Taiwan continue to be higher than those in the United States, partly due to lower labor costs.
Still, the company’s outlook in the U.S. has improved. TSMC has moved up the production schedule for its second factory in Arizona to the second half of 2027, and is accelerating construction of its third factory this year. The company said in a recent earnings call that it has also started applying for permits for a fourth factory.
Huang said TSMC’s original plans for the first 1,100 acres in Arizona included six wafer fabrication plants, two advanced packaging facilities, and a research and development center.
However, that land proved insufficient for expansion plans and an additional 900 acres were purchased. Some of the facilities included in the original plan will instead be built on this second piece of land, and the rest “will be used for future flexibility,” Huang said.
TSMC stock rose more than 3% on Friday in Taipei.
