Hsieh: TSMC's (TSM.US) investment in the U.S. is driven by demand, with its production capacity for the next two years fully booked.

The world's largest contract chipmaker, TSMC (TSM.US), is expanding its investment in the U.S. due to strong demand from American customers, its CEO said Thursday, adding that its production lines for this year and the next two years are fully booked. TSMC plans to build five new chip factories in the U.S. in response to President Trump's threat to impose tariffs on imported semiconductors.

This week, TSMC announced plans to invest an additional $100 billion in its U.S. factories to boost its chip production in the U.S. and support Trump's goal of increasing domestic manufacturing. The $100 billion will go toward three fabs, two advanced packaging plants and a research and development center, bringing TSMC's total investment in the U.S. to $165 billion.

TSMC's overseas investment plans also include projects in Japan and Germany. TSMC's CEO told reporters that while it plans to build three new production lines in the U.S. in the coming years, it will build 11 more in Taiwan this year. "We will continue to build them (in Taiwan) because it's still not enough," he said.

As a key manufacturing partner for Nvidia (NVDA.US), Apple (AAPL.US) and Qualcomm (QCOM.US), TSMC is a cornerstone of the U.S. chip industry, and shifting more production to the U.S. would solve a major supply chain risk for those companies. However, Trump said Tuesday that U.S. lawmakers should repeal a landmark bipartisan 2022 bill that provides $52.7 billion in subsidies for U.S. semiconductor manufacturing and uses the proceeds to pay down the national debt.