Taiwan Semiconductor Manufacturing is significantly accelerating its expansion plans in the United States.
According to a report, TSMC has already invested $165 billion in the U.S., and CEO C.C. Wei stated the company recently purchased additional land in Arizona, planning to create a "mega fab cluster." This expansion coincides with the company's record-breaking capital expenditure plan, underscoring its strong confidence in the sustained growth of AI chip demand.
TSMC previously announced its 2026 capital expenditure plan could reach as high as $56 billion, a substantial 37% increase from the $40.9 billion actually spent in 2025, setting a new historical record. The company forecasts its 2026 revenue growth will be close to 30%, surpassing analysts' average expectations.
TSMC CFO Wendell Huang, in an interview, indicated the company will continue to increase its investment scale in Arizona. "We have strong confidence in the AI mega trend, which is why we are increasing capital expenditure and expanding in Taiwan and the U.S.," he said. "We aim not just to expand, but to accelerate as much as possible to meet demand or narrow the gap."
The initial 1,100 acres of land purchased by TSMC in Arizona was originally planned for six fabs, two advanced packaging facilities, and one R&D center. However, as expansion plans escalated, this land became insufficient, prompting the company to acquire an additional 900 acres.
Some facilities originally planned for the first parcel of land will be relocated to the newly purchased plot, while the remainder will be "reserved for future flexibility." This land expansion provides the physical foundation for TSMC to build its "mega fab cluster" in the U.S.
Although the company has not disclosed the specific amount for its U.S. expansion plan, the midpoint of its 2026 capital expenditure is expected to increase by over 30% compared to 2025. This scale of investment reflects TSMC's assessment of the longevity of AI chip demand.
Progress at TSMC's first U.S. fab has exceeded expectations and it has already begun mass production. Huang stated that the fab's current yield rate and technical level are already on par with leading facilities in Taiwan. "This proves our manufacturing excellence can be replicated in the U.S., which is very meaningful for both us and our customers," he said.
The company has moved up the production schedule for its second Arizona fab to the second half of 2027, and construction on the third fab will accelerate this year. TSMC also stated it has begun applying for permits for a fourth fab.
However, Huang noted that the company's most advanced technologies will continue to be developed and scaled up in Taiwan, as TSMC can achieve the necessary collaboration between R&D teams and manufacturing operations there.
It is noteworthy that TSMC's first-quarter performance guidance also surpassed market expectations. The company expects revenue for the current quarter to reach $34.6 billion to $35.8 billion, higher than the consensus estimate of $33.22 billion. Guidance for gross profit margin and operating profit margin is 63%-65% and 54%-56% respectively, significantly above market estimates of 59.6% and 49.7%. Management indicated that capacity is very tight and capital expenditure will increase substantially over the next three years.
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