Rumor: TSMC (TSM.US) Plans New Texas Campus with Multiple Chip Factories, Total Investment May Reach Tens of Billions of USD

According to Zhitong Finance APP, TSMC (TSM.US) is exploring the construction of a new campus in Texas, which would add tens of billions of dollars in new investment to its multi-year U.S. manufacturing expansion plan. According to those familiar with the matter, the go-to chip foundry for Nvidia and Apple is seeking more overseas sites to meet the surging demand for artificial intelligence hardware. TSMC has already pledged a $26.5 billion investment for a large base in Arizona, where multiple fabs are under construction; one of the sources noted that the envisioned Texas investment would also involve multiple fabs.

So far this year, North American operations have accounted for more than 75% of TSMC’s wafer revenue, while AI chip designers like Nvidia and AMD have placed massive orders for its most advanced technologies. The AI boom has put pressure on TSMC's existing production capacity. Last month, Co-Chief Operating Officer Cliff Hou said that to keep up with demand, the company had roughly doubled the scale of its equipment procurement plan over the past year.

One of the sources stated that if TSMC ultimately decides to invest in Texas, the project would include multiple chip fabrication plants, each costing at least $2 billion. The sources cautioned that the plans remain in early stages and requested anonymity due to the confidential nature of the details.

The potential Texas investment hinges on whether U.S. lawmakers extend an advanced manufacturing tax credit set to expire at the end of this year, according to one of the individuals. The tax credit, which was a cornerstone of former President Joe Biden’s 2022 Chips Act, was raised to 35% last year and extended. Although a legislative pathway to extend the credit this year is still unclear, Republican Senator Mike Crapo from Idaho and Democratic Senator Ron Wyden from Oregon have both said they are committed to pushing the effort forward.

Texas already has a considerable semiconductor industry footprint, including massive chip manufacturing facilities built by Korea’s Samsung Electronics. Elon Musk is also advancing his Terafab project in the state, which will supply chips for his vast business empire.

TSMC executives, including CEO C.C. Wei, have repeatedly stated that international expansion will be driven by customer demand and will depend on cooperation and support from local governments. In addition to the Arizona base, the most valuable company in Taiwan has partnered with Sony Group to build a plant in Kumamoto, Japan, and is also working on an early-stage project in Saxony, Germany.

However, Texas is not the only site TSMC has recently considered. According to several sources familiar with the matter, the company has also been in discussions with Singaporean officials, who are actively courting semiconductor investment.

Singapore already has several chip fabs and serves as the Asia-Pacific hub for some of the world’s largest AI developers such as Meta. The city-state has witnessed growth driven by AI and aims to play an increasingly significant role in the value chain of the technology. TSMC’s recent interactions with Singapore have not been previously reported.

In a text message, TSMC said: “We do not comment on market rumors.” Singapore’s Economic Development Board declined to comment.

As the most valuable company in Asia, TSMC has historically concentrated its manufacturing in Taiwan and benefited from this focus, in part because it simplifies management and labor. Growing U.S. national security concerns, the COVID-19 pandemic, and the subsequent AI boom have gradually driven this wave of broad global expansion.

Any expansion of TSMC’s international business is unlikely to change its long-standing policy of keeping the most advanced chip manufacturing technology at home. Taiwanese officials have repeatedly emphasized that TSMC will keep its most cutting-edge R&D in Taiwan, and company executives have stated this is the most efficient way to advance technology.