TSMC mulls multibillion-dollar Texas campus for more AI chips

Taiwan Semiconductor Manufacturing Co (TSMC), the go-to chipmaker for Nvidia and Apple, is considering a multibillion-dollar investment in Texas to accommodate the surging demand for artificial intelligence hardware. This potential expansion would entail the construction of multiple fabrication plants, each projected to cost at least $20 billion, according to sources familiar with the plans.

The company has already earmarked $265 billion for an expansive site in Arizona, where it is constructing several fabrication plants. Business from North America constitutes over 75% of TSMC's wafer revenue thus far this year, and AI silicon designers such as Nvidia and Advanced Micro Devices have placed substantial orders for the company's most advanced technology.

The AI boom has strained TSMC's current capacity, prompting the company to double its planned equipment purchases over the past year. However, the Texas investment is contingent on the US extending an advanced-manufacturing tax credit, currently set to expire at year's end. Although the tax credit has not yet secured passage this year, Senate Republicans and Democrats have expressed commitment to its extension.

Texas boasts a robust semiconductor foundation, including a significant chip production complex established by South Korea's Samsung Electronics. Elon Musk is also developing a Terafab project in the state, which will supply chips for his extensive business empire. TSMC's CEO, CC Wei, has consistently emphasized that the company's international expansion is driven by customer demand and will depend on cooperation and support from local governments.

In addition to Texas, TSMC is also engaged in discussions with Singaporean officials, who are actively pursuing semiconductor investments. Singapore already hosts numerous chipmaking factories and serves as the Asia-Pacific headquarters for major AI developers like Meta Platforms. However, TSMC has not commented on its recent communications with Singapore, as the details remain unreported.