Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) is inching toward a much larger U.S. buildout as it seeks to get closer to major customers like Nvidia Corp. (NASDAQ:NVDA) and Apple Inc. (NASDAQ:AAPL) while reducing the geopolitical risk tied to Taiwan.
A broad trade agreement between Taiwan and the Trump administration is creating the opening for that expansion.
Arizona Emerges as Cornerstone of U.S. Strategy
The Taiwanese contract chipmaker is preparing to pour tens of billions of dollars into Arizona to add several new chip plants, which would lift its total presence in the state to roughly a dozen facilities, the Wall Street Journal reported on Sunday.
The expansion coincides with the new U.S.-Taiwan trade agreement that cuts tariffs on Taiwanese goods to 15% and includes $250 billion in planned Taiwanese investment in the U.S., along with $250 billion in credit guarantees.
The chipmaker plans to anchor its U.S. growth around a large Arizona “gigafab cluster.”
Land Acquisition and Capacity Timeline Accelerate
CEO C.C. Wei said the company has already bought additional land in the state after concluding its original 1,100-acre site, planned for six chip plants, two advanced packaging facilities, and an R&D center, would not be sufficient for future expansion. The company has since added another 900 acres to preserve flexibility.
Taiwan Semiconductor has also moved up the timeline for its second Arizona plant to the second half of 2027, accelerated construction of a third facility, and begun the permitting process for a fourth.
U.S. Commerce Secretary Howard Lutnick said the goal is to shift about 40% of Taiwan’s semiconductor supply chain to the United States.
That total includes the $165 billion Taiwan Semiconductor has already pledged for six new logic-chip fabs and two advanced packaging plants.
Capital Spending Ramps as Global Footprint Expands
Taiwan Semiconductor signaled it will keep raising spending as it expands.
The company said Thursday it plans capital expenditures of up to $56 billion this year.
It could add more Arizona logic fabs and bring more advanced capabilities to the U.S.
Taiwan Semiconductor is also exploring a potential push into the UAE, while it builds its first fab in Germany and continues ramping after opening a Japan factory in 2024.
Analyst Optimism Builds on Strong Stock Performance
The $1.8 trillion tech giant gained 56% in the last 12 months.
Bloomberg reported that multiple brokerages have raised price forecasts on Taiwan Semiconductor shares after the stock’s strong start to 2026.
TSM Price Action: Taiwan Semiconductor shares were down 1.06% at $338.77 during premarket trading on Tuesday, according to Benzinga Pro data.
Photo by Jack Hong via Shutterstock
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