TSMC Directs US$100 Billion to US Expansion After Record Q2 Run

Taiwan Semiconductor Manufacturing Company (NYSE:TSM) (TSMC) will inject an additional US$100 billion into its Arizona manufacturing hub, doubling down on its US footprint while coming off the heels of a record Q2 profit surge.

Chairman and CEO C.C. Wei told investors Thursday (July 16) that the fresh capital will fund at least four new logic wafer fabrication plants in Arizona dedicated to mass-producing state-of-the-art 2-nanometer chips.

"This is to build several or more semiconductor logical wafer fab for two nanometer MP technologies, as well as advanced packaging fabs to support the strong multi-year demand from our leading US customers," Wei said.

"We believe this investment will help to further foster the development of the US semiconductor ecosystem, strengthen the supply chain, and support an increasing number of high-tech, high-paying jobs in the US."

The new sites will also feature advanced packaging capabilities to serve major US clients, including NVIDIA (NASDAQ:NVDA) and Apple (NASDAQ:AAPL).

The US administration aggressively pressured global tech giants to onshore critical supply chains following pandemic-era shortages.

In January, Washington and Taipei brokered a landmark trade deal reducing US tariffs on Taiwanese imports to 15 percent in exchange for hundreds of billions of dollars in stateside semiconductor investments.

TSMC’s US expansion also arrives on the back of explosive second quarter earnings that demolished Wall Street estimates.

Net income skyrocketed 77.4 percent year-on-year to US$22 billion for the three months ending in June, logging the company’s fifth consecutive quarter of record profitability. Revenue climbed 36 percent to US$39.45 billion.

Riding this momentum, TSMC shares have surged more than 55 percent this year, pushing the manufacturer's stock market valuation to approximately US$2 trillion and cementing its status as Asia’s most valuable company.

High-performance computing, the primary architecture powering AI data centers, dominated TSMC's business mix at 66 percent of total revenue, eclipsing the once-dominant smartphone segment at 22 percent.

While scaling its US footprint, TSMC simultaneously continues to build out domestic capacity to alleviate bottlenecks in its advanced chip packaging. The company announced it will construct its third and fourth advanced packaging facilities at the Chiayi Science Park in southern Taiwan.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.