Taiwan Semiconductor Manufacturing Company (TSM) is significantly expanding its manufacturing footprint in the United States, with total planned investment now reaching $165 billion under a broader U.S.-Taiwan trade initiative. The world's leading contract chipmaker is establishing a major advanced semiconductor cluster in Arizona to meet surging demand, particularly from the artificial intelligence sector.
The expansion plan includes the construction of up to six fabrication plants (fabs), two advanced packaging facilities, and a research and development centre in Arizona. This commitment is part of a newly announced $250 billion U.S. investment package from Taiwanese companies, focusing on semiconductors, energy, and AI.
TSMC’s first Arizona fab, producing 4-nanometer chips, began volume production in late 2024. A second fab, destined for 3-nanometer technology, is scheduled for volume production in the second half of 2027. The company recently completed the purchase of a second parcel of land in Arizona to support this growth, providing flexibility to scale what it terms an "independent gigafab cluster."
Key customers for the U.S. facilities include major tech firms Apple, Nvidia, AMD, and Qualcomm. Apple has been cited as the first and largest customer for TSMC Arizona, and volume production of Nvidia's Blackwell GPUs began at the site in October 2025.
Market sentiment is overwhelmingly positive regarding TSMC's accelerated U.S. expansion. This strategic move is seen as a direct response to immense customer demand — especially from AI leaders like Nvidia — and mitigates geopolitical and supply chain risks by diversifying production away from a concentrated base in Taiwan. The scale of investment underscores TSMC's confidence in long-term demand for advanced semiconductors and solidifies its indispensable role in the global tech ecosystem. For the U.S., it represents a major victory in its strategy to onshore critical chipmaking capacity. While investors may monitor the significant capital expenditure and potential execution challenges in building a new semiconductor hub, the strategic imperative and secured customer base likely outweigh these concerns, positioning TSMC favourably for sustained growth in the AI era.
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