What's happening
TSMC, the go-to manufacturing partner for Nvidia and Apple, is exploring a major footprint in Texas that would pile on many tens of billions of dollars to its multiyear U.S. expansion, according to people familiar with the planning. The idea under review is a campus with multiple chip plants, with each fab requiring at least $20 billion if it moves ahead. The talks are early, and the people asked not to be named because the details are not public.
The company has already committed $265 billion to a large Arizona site where several fabrication plants are under development. Outside the U.S., TSMC is building plants in Japan's Kumamoto with Sony Group and pursuing an early-stage effort in Saxony, Germany. It has also held recent discussions with Singaporean officials seeking chip investments.
Why TSMC is expanding now
So far this year, North American clients account for more than 75% of TSMC's wafer sales, as AI chip makers such as Nvidia and Advanced Micro Devices have been booking large volumes of cutting-edge capacity. The AI rush has stretched available capacity, and to keep up, Deputy Co-Chief Operating Officer Cliff Hou noted last month that the company had approximately doubled its planned equipment purchases during the past year.
For most of its history as Asia's most valuable company, TSMC concentrated manufacturing in Taiwan to streamline management and labor. Even so, Taiwanese officials have repeatedly said, and executives agree, that the most advanced R&D will stay in Taiwan because that is the most efficient way to push its technology forward.
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The policy and political pieces that matter
One person familiar with the Texas talks said the investment hinges on whether U.S. lawmakers extend an advanced-manufacturing tax credit expiring at the end of this year. An extension has not yet found a clear path, but Senator Mike Crapo of Idaho and Senator Ron Wyden of Oregon have publicly affirmed their commitment to it.
TSMC declined to discuss the deliberations, saying in a text message, "We have no comment on market rumors." The Singapore Economic Development Board also declined to comment. Taiwan's Economic Daily News first reported earlier this week that TSMC was considering Texas. TSMC's recent communications with Singapore had not been previously reported. Singapore already hosts several chip factories and Asia-Pacific hubs for major AI developers such as Meta Platforms, has seen AI fuel growth, and aims to take on a bigger role in the technology's value chain.
Why this matters for your money
Texas is already a chip hub, with Samsung operating a sizable production complex, Elon Musk developing his Terafab project that will supply chips for his business empire, and Texas Instruments adding mature-node capacity in Sherman, just north of Dallas. TSMC leaders, including CEO C.C. Wei, have said overseas growth follows customer demand and depends on local government support. If the tax credit is extended and Texas gets a green light, expect several more U.S. fabs with minimum $20 billion price tags, stacked on top of the $265 billion effort in Arizona. The takeaway: AI demand is still yanking capital toward cutting-edge manufacturing, and policy choices in Washington could shape where the next wave of capacity lands.
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