TSMC weighs multibillion-dollar Texas campus expansion for AI chips

Taiwan Semiconductor Manufacturing Co. (TSMC) is considering a multibillion-dollar campus expansion in Texas to meet surging demand for artificial intelligence chips. The potential project, which would involve multiple fabrication plants costing at least $20 billion each, is contingent on the U.S. extending an advanced-manufacturing tax credit set to expire in late 2026. While TSMC expands globally in places like Arizona, Japan, and Germany, it plans to keep its most advanced research and development in Taiwan.

Proposed Texas campus expansion

• ▪Taiwan Semiconductor Manufacturing Co. is weighing a new campus in Texas involving multiple fabrication plants, with each plant estimated to cost at least $20 billion, according to people familiar with the plans
• ▪Taiwan Semiconductor Manufacturing Co. declined to comment on market rumors regarding its potential new campus expansion in Texas in a text message reported on October 1, 2026

US advanced-manufacturing tax credit

• ▪United States Senators Mike Crapo and Ron Wyden have stated they are committed to extending the advanced-manufacturing tax credit, which was increased to 35 percent and extended in 2025
• ▪Taiwan Semiconductor Manufacturing Co.'s potential Texas investment is contingent on United States legislators extending an advanced-manufacturing tax credit, a cornerstone of former President Joe Biden's 2022 Chips Act set to expire at the end of 2026

AI demand driving TSMC expansion

• ▪The artificial intelligence boom has strained Taiwan Semiconductor Manufacturing Co.'s existing capacity, forcing the company to roughly double its planned equipment purchases over the past year, according to deputy co-chief operating officer Cliff Hou last month
• ▪North American business accounts for more than 75 percent of Taiwan Semiconductor Manufacturing Co.'s wafer revenue so far in 2026, driven by orders from artificial intelligence silicon designers like Nvidia and Advanced Micro Devices
• ▪Unrelenting demand for artificial intelligence hardware has prompted Taiwan Semiconductor Manufacturing Co. to look into further overseas facilities to handle the workload

TSMC's other global expansion projects

• ▪Taiwan Semiconductor Manufacturing Co. has held conversations with Singaporean officials, who are aggressively seeking semiconductor investments, as part of its consideration of alternative expansion sites
• ▪Taiwan Semiconductor Manufacturing Co. is building chip plants in Kumamoto, Japan, in partnership with Sony Group, and is developing a nascent project in Saxony, Germany
• ▪Taiwan Semiconductor Manufacturing Co. has committed to spending $265 billion at an expansive site in Arizona, where the company is developing several fabrication plants

TSMC's manufacturing base in Taiwan

• ▪Taiwanese officials and Taiwan Semiconductor Manufacturing Co. executives have reiterated that the company will keep its cutting-edge research and development and most advanced chipmaking technology in Taiwan
• ▪Taiwan Semiconductor Manufacturing Co. has historically concentrated its chip plants in Taiwan for management and labor efficiency, but security concerns, Covid-19, and the artificial intelligence boom have driven its global expansion

Debatable claims

• ▪TSMC is justified in keeping its most advanced chipmaking technology in Taiwan
• ▪Congress should extend the advanced-manufacturing tax credit for semiconductor companies