Taiwan Semiconductor Manufacturing (TSM), or just TSMC, is the world’s largest and arguably the most important manufacturer of advanced semiconductors (excluding memory chips).
TSMC had already announced $65 billion worth of investments in Arizona, where they have three chip making facilities, the first of which began production in the fourth quarter of 2024.
TSMC CEO C.C. Wei was at the White House in early March and announced a new additional investment into the Arizona campus. This new investment is $100 billion and will be used to fund three new additional wafer fab facilities, two chip packaging facilities, as well as a research and development center.
Specifics on what manufacturing technology these new facilities will employ, and the exact timeline for the completion. remain to be seen. But it seems like this $100 billion is being planned to be spent over the course of the next four years. So, basically through the end of this decade, 2028-29 timeframe. We do know some of TSMC’s top customers, especially those chip designers in the U.S like Nvidia, Broadcom, AMD, Qualcomm, Apple, and Marvell Technology Group all want more chips made in the U.S. to support their products that ultimately get deployed in the U.S.
So this very large investment in U.S. manufacturing is set to get even bigger, and will no doubt support more advanced chip technologies. Perhaps TSMC’s upcoming 2 nanometer node (or N2) will get moved to Arizona in support of these design customers. But you might be wondering, where will a $100 billion investment over the course of four years come from (roughly $25 billion a year)?
Much like TSMC’s other investments into its fabs around the world, the company actually has the ability to self-fund these projects. TSMC is likely to surpass $100 billion in total sales just in 2025 alone, and is growing at an expected more than 20% year-over-year clip compared to 2024. TSMC is off to a hot start in the first two months of the year, too.
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https://pr.tsmc.com/english/news/3213
The company’s capital expenditures, or CapEx (spending on property and equipment), was already running at close to $30 billion last year. And on the fourth quarter 2024 earnings call, management said that CapEx spending is going up to roughly $40 billion in 2025, entering a new cycle of elevated spending on property and equipment.
So TSMC was likely already planning on deploying this $100 billion somewhere in support of its massive global manufacturing footprint – a footprint that includes nearly $250 billion in gross value of existing property and equipment, or on a net basis (subtracting accumulated depreciation on past purchases) about $100 billion in value of property and equipment.
TSMC has the cash to spend, and in years past they’ve discussed their need to expand their international manufacturing footprint beyond Taiwan. Back in 2022, we discussed these plans for, at the time, what was the five year outlook for TSMC’s international expansion. It seems with this new U.S. investment, the pace of that geographic diversification outside of Taiwan and into the U.S. is going to accelerate through 2030.
If you’re looking to invest in the coming semiconductor manufacturing boom, TSMC stock could be a great place to get started on your journey. It’s a great company to learn about if you’re interested in learning about how chips are made, and how the semiconductor global supply chain works. Check out our weekly newsletter and Semi Insider for more!
