TLDR
- TSMC is set to build multiple new Arizona plants, bringing the total to roughly a dozen facilities under a proposed trade agreement
- The deal includes Taiwan committing over $300 billion in U.S. investments while America reduces tariffs from 20%
- TSMC’s Taiwan-listed shares gained 1.18% Tuesday, helping push the Taiex to a record 30,707.22
- The chipmaker has already pledged $165 billion to U.S. operations with three plants currently planned
- The expansion directly competes with Intel’s domestic chip manufacturing goals backed by $8.9 billion in federal funding
TSMC plans to dramatically increase its Arizona manufacturing presence. The company will construct several new chip fabrication facilities in the state, bringing its total to approximately a dozen plants.
Taiwan Semiconductor Manufacturing Company Limited, TSM
The expansion is tied to trade negotiations between the United States and Taiwan. Sources familiar with the discussions told the Wall Street Journal about the plans.
Under the proposed deal, Taiwan would commit more than $300 billion in direct investment and spending in America. In return, U.S. tariffs on Taiwanese imports would drop from the current 20% level.
TSMC representatives declined to comment on the reported expansion. The company has already announced $165 billion in U.S. investments, including three fabrication plants.
Those earlier commitments came partly in response to geopolitical concerns. China’s territorial claims on Taiwan have pushed TSMC to diversify its manufacturing locations.
Stock Gains Push Index Higher
TSMC shares rose 1.18% to close at NT$1,710.00 on Tuesday. The chipmaker represents more than 40% of Taiwan’s entire stock market value.
The gain helped drive the Taiex benchmark index to an all-time high. It finished the session at 30,707.22, up 139.93 points or 0.46%.
Trading volume reached NT$723.43 billion on the Taiwan Stock Exchange. Foreign institutional investors were net buyers of NT$15.74 billion in shares.
TSMC’s American depositary receipts have more than tripled since late 2023. The surge reflects the company’s position supplying chips to Nvidia and other AI leaders.
The chipmaker also manufactures for AMD and Broadcom. Demand for AI processors has driven strong growth across TSMC’s customer base.
Supplier Stocks Rally on News
Companies that support TSMC’s operations also posted gains. United Integrated Services, a cleanroom construction firm, soared 10% to NT$1,080.00.
Marketech International, which provides technology integration services, climbed 7.34% to NT$292.50. These suppliers stand to benefit from the Arizona buildout.
MediaTek, a smartphone chip designer, added 2.77% to close at NT$1,485.00. The semiconductor index overall rose 1.12%.
Analysts expect continued strength ahead of TSMC’s investor conference Thursday. The company will discuss growth prospects during the AI boom.
Market watchers believe the Taiex could test 31,000 points soon. Rotation buying across sectors continues to support the index.
Intel Faces Stiffer Competition
TSMC’s expanded U.S. presence creates headwinds for Intel’s strategy. Intel aims to become a leading domestic chip manufacturer with help from government support.
The company received $8.9 billion in federal investment last August. Those funds target expanding Intel’s fabrication capabilities.
TSMC building a dozen Arizona plants directly challenges Intel’s positioning. Both companies will compete for talent, resources, and customers in the U.S. market.
The trade deal framework could finalize soon. Taiwan’s commitment of $300 billion would represent one of the largest foreign investment packages in U.S. history.
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