Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) is expanding its U.S. footprint in Arizona, but analysts say only a limited share of its most advanced chipmaking will shift stateside by the end of President Donald Trump’s second term.
Economist Lien Hsien-ming, president of the Chung-Hua Institution for Economic Research, said less than 15% of Taiwan Semiconductor’s advanced manufacturing processes are likely to relocate to the U.S. by the end of Trump’s term.
In a Facebook post, Lien responded to comments from U.S. Commerce Secretary Howard Lutnick, who told CNBC that Washington aims to move 40% of Taiwan’s supply chain to the U.S. before 2029.
Lien said current construction timelines make that target unlikely, Focus Taiwan reported on Wednesday.
Arizona Buildout Sets the Pace
Lien pointed to Taiwan Semiconductor’s Arizona expansion, where the company is investing $65 billion to build three fabs, according to Focus Taiwan.
The chipmaker has also pledged an additional $100 billion for three more fabs, two IC assembly plants, and a research and development center in the U.S.
Lien said Taiwan Semiconductor has begun installing equipment at its second Arizona fab, which is scheduled to enter mass production in 2027, and started construction on a third fab earlier this year.
The company is also seeking a permit for a fourth facility, though Lien said it is unlikely mass production at the third, or a fourth, fab will begin before Trump’s term ends.
Trade Deal and Land Purchases Fuel Expansion
Despite the timeline constraints, Taiwan Semiconductor is moving closer to a major Arizona expansion to serve customers like Nvidia Corp. (NASDAQ:NVDA).
A new trade agreement between Taiwan and the Trump administration has supported the buildout, cutting tariffs on Taiwanese goods to 15% and including $250 billion in planned Taiwanese investment in the U.S., plus $250 billion in credit guarantees.
The company plans to center its U.S. strategy on a large Arizona “gigafab cluster” and has already expanded its land holdings, adding 900 acres beyond its original 1,100-acre site to preserve flexibility for future growth.
TSM Price Action: Taiwan Semiconductor shares were up 1.23% at $331.17 during premarket trading on Wednesday. The stock is approaching its 52-week high of $351.33, according to Benzinga Pro data.
Photo by Jack Hong via Shutterstock
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