TSM.US is planning a new Texas campus: multiple fabs with a total investment of tens of billions of dollars

The Zhitong Finance App learned that Taiwan Semiconductor Manufacturing Company (TSM.US) is studying the construction of a new park in Texas, which will add tens of billions of dollars in additional investment to its plan to build a factory in the US that has continued for many years. According to people familiar with the matter, the chip foundry of choice for Nvidia and Apple is looking for more overseas sites to cope with the continued rise in demand for artificial intelligence hardware. TSMC has pledged to invest 265 billion US dollars at a large Arizona site, which is currently constructing multiple fabs; one of these sources said that the planned Texas investment would also involve multiple fabs.

So far this year, the North American business accounts for more than 75% of TSMC's wafer revenue, and artificial intelligence chip design companies such as Nvidia and AMD have brought huge orders for some of their most advanced technologies. The artificial intelligence boom has put pressure on TSMC's current production capacity. Cliff Hou (Cliff Hou), the company's deputy co-operating director, said last month that in order to keep up with demand, the size of its equipment procurement plan has roughly doubled in the past year.

According to one of these sources, if TSMC finally decides to invest in Texas, the project will include multiple chip manufacturing plants, each costing at least $20 billion. People familiar with the matter warned that the relevant plans are still in their early stages, and they requested anonymity since details have not yet been disclosed.

According to one of these sources, potential Texas investment depends on whether US lawmakers extend an advanced manufacturing tax credit due to expire at the end of this year. This tax credit is the cornerstone of former President Joe Biden's 2022 Chips Act (Chips Act), which was raised to 35% and extended last year. Although no viable legislative path has been found to extend the credit this year, Idaho Republican Senator Mike Crapo (Mike Crapo) and Oregon Democratic Senator Ron Wyden (Ron Wyden) both said they are committed to promoting the matter.

Texas already has a sizable semiconductor base, including a huge integrated chip production facility established by South Korea's Samsung Electronics. Elon Musk is also advancing his Terafab project in the state, which will supply chips to its huge commercial empire.

TSMC executives, including CEO C.C. Wei (C.C. Wei), have always said that the company's international expansion will serve customer needs and depend on the cooperation and support of local governments. In addition to the Arizona base, the Taiwanese company with the highest market capitalization is also cooperating with the Sony Group in Kumamoto, Japan, and is advancing an early project in Saxony, Germany.

However, Texas is not the only potential site TSMC has visited recently. According to several people familiar with the matter, the company has also communicated with Singaporean officials who are actively soliciting investment in semiconductors.

Singapore already has several chip manufacturing plants and is also the Asia-Pacific hub for some of the world's largest artificial intelligence developers, such as Meta. The city-state has seen growth driven by artificial intelligence and hopes to play an increasingly important role in related technology value chains. TSMC's recent communication with Singapore has not been previously reported.

“We are not commenting on market rumors,” TSMC said in a text message. The Singapore Economic Development Authority declined to comment.

As the company with the highest market capitalization in Asia, TSMC has spent most of its history building factories in Taiwan, China, and has benefited from this concentration of production, in part because it has made management and employment simple and efficient. Growing US national security concerns, the COVID-19 pandemic, and the subsequent boom in artificial intelligence have gradually fueled this widespread 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 on the mainland. Taiwanese officials have repeatedly stated that TSMC will keep cutting-edge research and development in Taiwan, and company executives have also stated that this is the most effective way to advance technology.