TSMC’s Arizona chip expansion won’t happen after US investment: CFO

Thanks to another earnings report and a new US-Taiwan trade deal, Taiwan Semiconductor Manufacturing Co. It is poised to accelerate its multibillion-dollar expansion in Arizona.

The world’s largest contract chipmaker has earmarked $165 billion in the U.S. in line with Washington’s push to revive domestic chip manufacturing. But TSMC executives said costs will continue to rise as the company expands its capacity to meet demand for artificial intelligence chips.

Speaking to CNBC’s Emily Tan on Thursday, TSMC Chief Financial Officer Wendell Huang said the firm will continue to increase its investments in Arizona.

“We are confident in the AI ​​mega trend, so we are ramping up capital spending to expand in Taiwan and the US,” Huang said. “Try not only to expand, but also to accelerate where you can meet or narrow the gap.”

The comments came hours after Chief Executive CC Wei said in the company’s quarterly earnings statement that TSMC recently purchased additional land in Arizona and plans to build a “gigafab cluster” in the state.

While the company did not disclose the dollar value of its planned U.S. expansion, it expects capital spending in the new year to rise more than 30% at the midpoint of 2025.

Arizona’s expansion coincides with the US-Taiwan trade agreement signed on Thursday, which will cap US tariffs on Taiwanese goods from 20% to 15%, without maintaining existing tariffs.

Under the agreement, Taiwanese firms will provide $250 billion in U.S. direct investment in semiconductors, AI and related sectors, as well as $250 billion in loan guarantees to strengthen supply chains. The deal also offers favorable treatment for the chips, supporting efforts to restore US manufacturing.

Ahead of TSMC’s earnings release and trade deal, Wall Street Journal reported The Taiwanese chip giant is planning a major expansion in Arizona as part of trade talks between the US and Taiwan, citing unnamed sources.

However, Huang denied on Thursday that US investment plans were directly linked to these trade talks.

“The (US-Taiwan) trade deal is between the two governments and we are not part of the discussions,” he said.

“But I will say that we continue to invest and accelerate investment in Arizona based on customer demand, and we’re making very good progress with the (first fab) in Arizona up and running.”

The push for expansion comes after years of delays and concerns after progress on its current form in the US.

TSMC’s first factory to begin mass production is now producing chips with performance and technology levels comparable to the company’s flagship facility in Taiwan, executives said.

“This shows that our manufacturing success can be replicated in the US. It’s very important to us, and it’s also very important to our customers,” Huang said.

In addition, the company has moved the production date of its second plant in Arizona to the second half of 2027, and the construction of the third facility is accelerating this year. TSMC has also begun applying for permits for a fourth factory, the company said in a recent earnings call.

According to Huang, TSMC’s initial plan for the first 1,100 acres in Arizona includes six wafer plants, two advanced packaging facilities and a research and development center.

However, this land proved insufficient for expansion plans, prompting the purchase of an additional 900 acres. Some of the facilities that were part of the original plan will now be built on this second parcel of land instead, while the rest will be “used for future flexibility,” Huang said.

Shares of TSMC traded up more than 2% in Taipei on Friday.