TSMC Expands U.S. Footprint with $165 Billion Commitment Amid AI Chip Demand Surge

Taiwan Semiconductor Manufacturing Company (TSMC) has acquired an additional 900-acre plot in Arizona, supplementing its initial 1,100-acre site, as part of a $165 billion U.S. investment strategy. The expansion addresses capacity constraints driven by soaring demand for AI chips, with capital expenditures projected to rise over 30% year-over-year.

The company's first Arizona fab is now achieving production yields on par with its Taiwanese facilities, with volume output slated for Q4 2024. A second fab will commence operations in late 2027, while plans for a third facility target the end of the decade. The development creates what CEO C.C. Wei describes as a 'gigafab cluster' in the American Southwest.

Concurrent with the expansion, a U.S.-Taiwan trade agreement has capped tariffs at 15% while securing $250 billion in commitments from Taiwanese firms. TSMC's accelerated spending reflects what CFO Wendell Huang calls 'strong conviction in the AI mega-trend,' with parallel investments occurring in both U.S. and Taiwanese facilities.