U.S. President Donald Trump (right) and C.C. Wei, chief executive officer of Taiwan Semiconductor Manufacturing Co. (left), shake hands during an announcement of an additional $100 billion into TSMC’s U.S. manufacturing at the White House in Washington, DC, U.S., on March 3, 2025.
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Buoyed by yet another blockbuster earnings report and a new U.S.-Taiwan trade agreement, Taiwan Semiconductor Manufacturing Co. is poised to accelerate its multibillion-dollar expansion in Arizona.
The world’s largest contract chipmaker has already committed $165 billion in the U.S., aligning with Washington’s push to rebuild its domestic chip manufacturing. But TSMC executives have signaled that spending will rise even further as the company expands capacity to meet demand for artificial intelligence chips.
Speaking Thursday with CNBC’s Emily Tan, TSMC Chief Financial Officer Wendell Huang said the firm would continue to ramp up its investments in Arizona.
“We have strong conviction on the AI mega trend, and that is the reason we are stepping up the capital expenditures to expand in Taiwan and in the U.S.,” Huang said. “Not just to expand, but also try to accelerate where it is possible to satisfy or narrow the gap.”
The comments came just hours after Chief Executive Officer C.C. Wei said on the company’s quarterly earnings call that TSMC had recently purchased additional land in Arizona and planned to build a “gigafab cluster” in the state.
While the company did not disclose the dollar value of its planned expansions in the U.S., it forecast capital expenditure in the new year to increase over 30% at the midpoint compared with 2025.
Trade deal timing
The Arizona expansion coincides with a U.S.-Taiwan trade deal signed Thursday that caps U.S. tariffs on Taiwanese goods at 15%, down from 20%, without stacking on existing rates.
Under the agreement, Taiwanese firms commit $250 billion in direct U.S. investments across semiconductors, AI and related sectors, along with $250 billion in credit guarantees to strengthen supply chains. The deal also grants favorable treatment for chips, supporting efforts to reshore manufacturing to the U.S.
It demonstrates that our manufacturing excellence can be repeated in the U.S.
Wendell Huang
Chief Financial Officer, TSMC
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 U.S.
Ahead of TSMC’s earnings release and the trade deal, the Wall Street Journal reported that the Taiwanese chip giant had been planning a significant expansion in Arizona as part of trade negotiations between the U.S. and Taiwan, citing confidential sources.
However, on Thursday, Huang denied that its U.S. investment plans were directly tied to those trade talks.
“The [U.S.-Taiwan] trade deal is between two governments, and we are not part of the discussions,” he said.
“But what I will say is we are continuing to invest and accelerate our investment in Arizona because of customers’ demand, and we actually are making very good progress with our [first fab] in Arizona being up and running.
U.S. progress
The push to expand follows progress at its current U.S. facility following years of delays and concerns.
According to executives, TSMC’s first fabrication plant, which has already begun mass production, is now producing chips with yields and technology levels comparable to those of the company’s leading facilities in Taiwan.
“It demonstrates that our manufacturing excellence can be repeated in the U.S. It’s very meaningful for ourselves, and it’s also very meaningful for our customers,” Huang said.
However, he noted that the company’s most advanced technologies would continue to be developed and scaled up in Taiwan, where TSMC benefits from the necessary collaboration between its research teams and manufacturing operations.
Profit margins in Taiwan also remain higher than in the U.S., partly due to lower labor costs.
Still, the company’s outlook in the U.S. has improved. TSMC has moved up the production timeline for its second Arizona plant to the second half of 2027, with construction on a third facility accelerating this year. It has also begun applying for permits for a fourth plant, the company said at its recent earnings call.
According to Huang, TSMC’s original plan for its 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 to be insufficient for the expansion plans, prompting the purchase of an additional 900-acre lot. Some facilities that were part of the original plan will now be built on this second piece of land instead, with the remainder “used for future flexibilities,” Huang said.
TSMC shares were trading up more than 3% in Taipei on Friday.
