The fresh commitment raises TSMC's total planned spending in Arizona to $265 billion, covering new wafer fabs and advanced packaging facilities
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Taiwan Semiconductor Manufacturing Co. is committing an additional $100 billion to its Arizona operations, citing what the company describes as a multi-year structural demand surge for AI chips. The pledge brings TSMC $TSM's total planned investment in Arizona to $265 billion.
Chief Financial Officer Wendell Huang said the new funds will cover both front-end wafer fabrication facilities and back-end advanced packaging facilities. The company also raised its full-year capital expenditure guidance to between $60 billion and $64 billion, the company said.
"We're seeing this strong-structure, multi-year demand, and we do not plan to leave any food on the table for anybody else," Huang told CNBC. "As long as the megatrend is right, then we're able to continue to deliver the profitable growth to our shareholders."
TSMC's first Arizona fabrication plant is up and running, with yields matching those of its primary Taiwan facility, according to Reuters. Equipment installation at a second fab is imminent, a third fab is currently under construction, and groundwork for both a fourth fab and the site's inaugural advanced packaging facility is already in motion. Taken together, existing and future projects are expected to grow TSMC's Arizona presence to 12 fabrication and advanced packaging facilities alongside a dedicated R&D center.
Wendell Huang acknowledged physical constraints facing the expansion, including a shortage of construction workers and infrastructure limitations in Arizona, and said the company would work with government officials to address them.
On chip technology, TSMC is converting 5-nanometer capacity to the 3-nanometer node to meet customer demand, Huang told CNBC. He described 2-nanometer technology as the company's newest revenue driver heading into the third quarter, following its initial revenue generation in the second quarter. The smaller the transistor, the more that can be packed onto a single chip, yielding more powerful and efficient semiconductors.
TSMC's second-quarter results, which the company reported last week alongside the Arizona investment announcement, showed net income of NT$706.56 billion, a 77.4% increase from the same period a year earlier and a record for the fifth consecutive quarter. High-performance computing — the category that includes AI chips — generated 66% of second-quarter revenue. For the third quarter, TSMC forecast revenue of between $44.6 billion and $45.8 billion, the company said.
TSMC stock fell 7.3% on Friday despite the record results but remains up roughly 48% this year.
Wendell Huang said U.S. fabrication costs run four to five times higher than in Taiwan, but argued the scale-up would ultimately strengthen the U.S. semiconductor supply chain. TSMC's domestic expansion is also ongoing, with the company developing 13 leading-edge and advanced packaging fabs in Taiwan over a multi-year horizon, according to Reuters.
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