Taiwan Semiconductor Manufacturing Company (TSMC) is accelerating the expansion of its Arizona manufacturing campus as it seeks to meet sustained demand for advanced AI chips, with the company increasing its planned US investment to $265bn.
The company recently committed an additional $100bn to the Arizona project, on top of previous investments.
Speaking following the company's second-quarter earnings, TSMC executives said demand for AI processors remains strong and is expected to continue for years, prompting the foundry to bring forward capacity expansion plans in Arizona.
The expansion includes multiple advanced semiconductor fabrication plants, advanced packaging facilities and a research and development centre, creating what TSMC describes as a major US semiconductor manufacturing hub.
TSMC's first Arizona fab is already in production, manufacturing advanced 4nm chips, while additional facilities are planned to produce 3nm and 2nm process technologies.
The additional investment will expand the Arizona campus to include 12 fabrication, advanced packaging and research and development facilities.
The US Department of Commerce welcomed TSMC's additional investment in advanced semiconductor manufacturing and packaging facilities in Arizona, describing it as part of one of the largest foreign direct investments in US history.
"We believe this investment will further foster the development of the U.S. semiconductor ecosystem, strengthen the supply chain, and support significant job creation in the United States," said Dr C.C. Wei, TSMC Chairman and CEO.
The expansion is being driven by continued orders from AI chip designers and hyperscale technology companies, with TSMC reporting that high-performance computing applications remain its largest source of revenue.
The company also raised its full-year capital expenditure guidance to between $60bn and $64bn to support additional manufacturing capacity.
The expansion will require additional semiconductor cleanroom capacity, including ultra-clean manufacturing environments, contamination control systems, high-purity process utilities and advanced packaging infrastructure to support next-generation AI chip production.
The company said its US operations are performing in line with comparable facilities in Taiwan despite higher construction costs and workforce challenges.
Despite expanding overseas, TSMC said Taiwan will remain the centre of its most advanced manufacturing, with additional fabs continuing to be built there in parallel with its US investment.
