HONG KONG, Aug. 1 (AP) — Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker and a linchpin of global technology supply chains, announced on Thursday a $100 billion expansion of its planned U.S. manufacturing investment, pushing the firm’s total commitments to American chip production to $265 billion. The announcement came alongside the release of the firm’s quarterly financial results, which delivered record-breaking profits that outpaced analyst expectations, fueled by unrelenting demand for AI-capable semiconductors.
As the global leader in advanced chip manufacturing and one of the world’s most valuable public companies, TSMC’s financial performance and strategic decisions are closely watched as a key benchmark for the broader global semiconductor sector and the fast-growing artificial intelligence industry. Right now, the company’s outlook carries extra weight amid ongoing market volatility driven by widespread concerns over whether the current AI boom is inflating an unsustainable asset bubble.
Against a backdrop of surging global demand for AI-related chips, TSMC has already launched major capacity expansion projects across three key hubs: its home base of Taiwan, Japan, and the United States. Alongside the new U.S. investment commitment, the firm also raised its 2024 annual capital expenditure guidance to a range of $60 billion to $64 billion, up from its earlier projection of $52 billion to $56 billion to account for accelerated buildout plans.
TSMC, a critical supplier to major tech giants including Nvidia and Apple, previously pledged $165 billion to develop a chip manufacturing complex in Arizona, where six total fabrication facilities are already in the works. The additional $100 billion in funding is specifically earmarked to meet growing long-term demand from the company’s major U.S.-based clients, TSMC Chairman and Chief Executive Officer C.C. Wei explained during the firm’s quarterly earnings call.
“This investment will help to further foster the development of the U.S. semiconductor ecosystem, strengthen the supply chain and support an increasing number of high-tech, high-paying jobs in the United States,” Wei said during the call. He added that global AI-related demand remains “extremely robust,” noting that “the AI megatrend continues to drive the need for more and more computation” that requires increasingly advanced semiconductor hardware.
For the April-June second quarter, TSMC reported a record net profit of 706.6 billion new Taiwan dollars, equal to approximately $22 billion. This represented a 77% year-over-year increase from the same period last year, and landed above the consensus profit forecast compiled by industry analysts.