(July 16): Taiwan Semiconductor Manufacturing Co (TSMC) plans to spend an additional US$100 billion to expand US chipmaking capacity, formalising a pledge that’s part of a larger deal between Washington and Taipei to bring semiconductor manufacturing to American soil.
That expands the company’s total investment plan to US$265 billion in total, a US official said. The extra US$100 billion will be used to build four chip plants, taking its eventual US presence to 10 fabrication plants and two packaging facilities, according to the official, who declined to be named as the information is not yet public.
Over the last several years, policymakers in Washington have grown increasingly concerned that the majority of cutting-edge semiconductors — one of the most coveted resources in a tech-powered global economy — are produced in Taiwan: an earthquake-prone, self-governing island that China has claimed as its own and threatened to take by force.
Last year, US Commerce Secretary Howard Lutnick persuaded TSMC — both Asia’s largest company and the advanced manufacturer that Nvidia Corp relies on to make AI chips — to boost its investment commitments in Arizona.
Geopolitical considerations and a strategic decision to be closer to key AI customers in the US have driven TSMC to steadily boost those investment plans. Under then US president Joe Biden’s Chips Act programme, the company agreed to invest US$65 billion outside of Phoenix, Arizona, with help from a US$6.6 billion US government grant.
As the Trump administration renegotiated many of those chips deals, Lutnick pushed the company to expand its commitment, resulting in an initial jump to US$165 billion in March 2025. Then again, at the end of last year, the US used the threat of tariffs to secure even larger investment commitments.
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The broader agreement struck in January lowered tariffs on Taiwan to 15% in exchange for it directly investing US$250 billion into projects within US borders. TSMC’s US$65 billion commitment during the Biden administration does not appear to count towards the US$250 billion total.
The additional funding would go towards four additional fabs to produce logic chips with two-nanometre process technology, which is the most advanced commercially available now, according to the US official and earlier Bloomberg reporting. Depending on market conditions, TSMC may ultimately decide to shift that mix of facilities to three logic fabs and one packaging plant, the official said, offering no details on the timing of the overall investment.
TSMC’s first fab outside of Phoenix began volume production of four-nm chips in late 2024 and its second fab is expected to start making more advanced three-nm chips in the second half of next year.
Uploaded by Liza Shireen Koshy
