Taiwan Semiconductor (TSMC) Stock: $165 Billion U.S. Commitment Grows

TLDR

• TSMC purchased a second 900-acre plot in Arizona after outgrowing its initial 1,100-acre site for planned expansion
• The company expects capital expenditures to jump over 30% in the new year to meet AI chip demand
• TSMC’s first Arizona fab is now producing chips with yields matching Taiwan facilities, with production starting in Q4 2024
• A U.S.-Taiwan trade deal caps tariffs at 15% and includes $250 billion in commitments from Taiwanese companies
• The company’s second Arizona fab moves to production in late 2027, while a third fab targets end-of-decade launch

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TSMC has completed the purchase of an additional 900 acres in Arizona as the chipmaker ramps up its U.S. manufacturing footprint. The move comes after the company’s original 1,100-acre site proved insufficient for its expansion plans.

Taiwan Semiconductor Manufacturing Company Limited, TSM

The additional land will house some facilities originally planned for the first site. The remainder provides flexibility for future growth. CEO C.C. Wei described the vision as building a “gigafab cluster” in Arizona during the company’s quarterly earnings call.

TSMC’s first Arizona fabrication plant began volume production in the fourth quarter of 2024 using 4-nanometer technology. The facility now produces chips with yields and technology levels matching the company’s leading Taiwan operations.

The company has already secured major customers for its Arizona operations. Apple serves as the first and largest customer, while Nvidia, AMD, and Qualcomm also utilize the facility. TSMC Arizona began producing Nvidia’s Blackwell GPUs using its N4P process in October 2025.

Production Timeline Accelerates

Construction of the second Arizona fab is complete, with tool installation scheduled for 2026. The facility will use 3-nanometer process technology with volume production expected in the second half of 2027.

A third fab broke ground in April 2025 and will produce 2-nanometer chips and more advanced technologies. Volume production targets the end of the decade. TSMC is currently applying for permits for a fourth fab along with its first advanced packaging plant.

The original Arizona plan included six wafer fabrication plants, two advanced packaging facilities, and a research and development center. TSMC has committed $165 billion to its U.S. operations to date.

Trade Deal Framework

A U.S.-Taiwan trade deal signed Thursday caps tariffs on Taiwanese goods at 15%, down from 20%. The agreement includes $250 billion in direct U.S. investments from Taiwanese firms across semiconductors, AI, and related sectors, plus $250 billion in credit guarantees.

U.S. Commerce Secretary Howard Lutnick stated the deal aims to bring 40% of Taiwan’s semiconductor supply chain to American soil. The $250 billion figure includes TSMC’s $100 billion commitment announced in 2025.

Profit margins in Taiwan remain higher than in the U.S., partly due to lower labor costs. The company plans to continue developing its most advanced technologies in Taiwan, where research teams collaborate closely with manufacturing operations.

TSMC shares traded up more than 3% in Taipei on Friday following the earnings report and trade deal announcement.

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