TAIPEI (Taiwan News) — TSMC is weighing an expansion of its US footprint as part of broader trade negotiations and global capacity planning, sources said.
The chipmaker may inject an additional NT$3.14 trillion (US$100 billion) into its US operations. The investment could fund four more wafer fabs, helping keep chip sales to local customers tariff-free, according to CTEE and the Financial Times.
Details of Taiwanese semiconductor and technology companies’ combined NT$7.85 trillion (US$250 billion) investment commitment to the US as part of a trade agreement remain undisclosed. Media reports suggest specifics may only emerge after an April summit between US President Donald Trump and Chinese leader Xi Jinping.
Under the deal, Taiwanese chipmakers building factories in the US can import materials and equipment tariff-free, up to 2.5 times a plant’s planned capacity. Once factories begin operating, they can also export some chips duty-free, up to 1.5 times production.
Chai Huan-hsin (柴煥欣), vice president of Cloud Express’ industry research institute, said there could be two versions of the deal. The version released to the public would show only part of the plan, while an undisclosed version may reveal TSMC’s intention to build additional wafer fabs in the US.
US Commerce Secretary Howard Lutnick has said he wants 40% of Taiwan’s chip supply chain to be relocated to the US. Against that backdrop, analysts said additional TSMC investment appears unavoidable.
The chipmaker's supply chain is expected to contribute only about NT$942.3 billion, far short of the NT$7.85 trillion target. TSMC is expected to fill most of the gap.
Even so, high production costs in the US make it uncertain whether TSMC can maintain profit margins comparable to its operations in Taiwan, making the expansion a significant challenge, Chai said.
TSMC CFO Huang Ren-hao (黃仁昭) said the company is confident in growing demand for artificial intelligence chips, which underpins plans to increase investment this year to NT$1.63-1.76 trillion.
Experts expect about three-quarters of TSMC's capital expenditure this year to remain in Taiwan, focused on the 2-nm process at Hsinchu and Kaohsiung fabs, while next-generation 1.4-nanometer production is predicted to be based in Taichung. The remaining quarter is projected to go to Germany, Japan, and the US.
Even if TSMC expands in the US, analysts expect its operations to stay relatively modest compared with its Taiwanese facilities for years. The company has previously projected that when its Arizona plant is fully up and running in the early 2030s, it will handle about 30% of its most advanced chip production for chips at 2 nm and below.
With TSMC continuing rapid expansion in Taiwan, the US share of its most advanced production is unlikely to exceed 30%. Vice Premier Cheng Li-chiun (鄭麗君) has described Lutnick's goal of relocating 40% of production to the US as “impossible.”
