issued Monday, July 20, 2026 · 09:09 AM
[TAIPEI] TSMC is investing another $100 billion to expand its Arizona facility and anticipates strong multi-year demand for its AI chips, but executives said the company needs to address several challenges, including a shortage of construction workers in Arizona.
After blockbuster second-quarter results on Thursday (July 16), Chief Financial Officer Wendell Huang said the company was “very pleased” with its progress in Arizona and had decided to increase its investment to $265 billion.
“We will continue to invest,” he said in an interview, adding that the company is very grateful for the U.S. government’s support.
“We continue to see strong customer demand, multi-year structural demand.”
As the world’s leading manufacturer of cutting-edge AI chips and a major supplier to NVIDIA, TSMC has become a barometer of demand in the global semiconductor industry, with aggressive capital spending and soaring profit margins.
The pledge to expand operations in Arizona is a victory for U.S. President Donald Trump, who has pushed to expand domestic semiconductor manufacturing.
President Trump has repeatedly accused Taiwan of stealing America’s semiconductor business. He said that by the time he leaves office, the United States will account for 50% of the world’s semiconductor manufacturing capacity.
Arizona factory
TSMC’s first Arizona manufacturing plant, or fab, is operational and achieving yields “comparable” to its flagship fab in Taiwan, Huang said.
Related items
Huang said the second plant will begin receiving equipment soon, while construction on the third plant is underway, and preparations have begun for the fourth plant and the site’s first advanced packaging facility.
In total, current and planned projects will bring TSMC’s Arizona footprint to 12 manufacturing and advanced packaging facilities, as well as a research and development center. He declined to provide a timeline for the latest investment.
But “there are physical constraints, such as the number of construction workers and available infrastructure,” Huang said. “We will continue to work closely with the government to resolve these issues.”
At the same time, TSMC continues to invest in the country, with 13 state-of-the-art advanced packaging plants under construction over the next few years.
“Land is a scarce resource in Taiwan,” Huang said. “So whenever we have land available, we intend to use it for cutting-edge technology.”
“Introducing cutting-edge technology requires very close collaboration between R&D and operations,” he added. “It has to be Taiwan, and once it stabilizes, we can consider moving overseas.”
Issuance of corporate bonds
When asked if the company would consider raising funds by selling new shares in the United States, Hwang said that if market conditions were favorable, “we would not rule out issuing new bonds.”
Despite aggressive expansion plans, TSMC faces headwinds from geopolitical tensions between the US and China as the US seeks to control advanced chip exports to China.
Reuters reported last year that TSMC could be fined more than $1 billion to resolve a U.S. export control investigation into its chips being included in Huawei’s AI processors.
Huang referred questions regarding the circumstances of the case and potential penalties to the U.S. government, but said TSMC’s internal export control system is constantly under review.
“I have to say there’s only so much we can do in terms of complying with all the rules and regulations. But when customers sell to customers, customers sell to customers,” he said.
“At some point, you lose visibility. That’s the reality.”
Investors are concerned about the sustainability of the AI boom as big infrastructure spending has recently resurfaced.
TSMC’s Taipei-listed shares fell 7.3% on Friday despite the company’s record performance. Still, the company’s stock price has risen nearly 50% this year.
TSMC has long been the overwhelming market leader in making the world’s most advanced chips, but rivals such as Samsung Electronics Co., which has benefited from a rebound in the memory chip market, and Intel Corp., which is backed by the U.S. government, are also trying to close the gap.
Huang said the company remains confident in its business model.
“We’re not going to leave anything on the table,” he said. “Our competitors are good, but we are even better.” Reuters
