Taiwan's TSMC to Accelerate US Expansion for Advanced Chip Production

Taiwan Semiconductor Manufacturing Co. (TSMC) plans to accelerate its production timeline for 2-nanometer chips in the US to meet growing demand for artificial intelligence (AI) applications. The company will also expand its investments in the US beyond the $165 billion already committed. TSMC's US-based manufacturing facility in Phoenix, Arizona, will play a key role in the production of advanced chips.

Taiwan Semiconductor Manufacturing Co. (TSMC) has announced plans to accelerate its production timeline for 2-nanometer chips in the United States to meet the growing demand for artificial intelligence (AI) applications. The company, which is the world's leading contract chipmaker, is expanding its investments in the US beyond the $165 billion already committed. The new strategy aims to enhance TSMC's production capacity in the US, with its manufacturing facility in Phoenix, Arizona, playing a key role in the production of advanced chips.

The decision comes at a time when AI-related spending is surging worldwide, expected to reach approximately $1.5 trillion by 2025 and over $2 trillion in 2026, according to a Gartner forecast. This significant increase in demand for AI chips is driven by tech giants like Nvidia and Apple, which are investing heavily in data centers and high-end chips, according to a Bloomberg report.

TSMC's Chief Executive Officer C.C. Wei has repeatedly expressed confidence in the sustainability of AI demand. However, he has also warned about the uncertainty surrounding US trade policies and geopolitical tensions, which could disrupt the global semiconductor supply chain, a concern noted in the Bloomberg report. To mitigate these risks, TSMC is expanding its operations in the US, including investing an additional $100 billion in the country, the Yahoo article reported.

The concentration of TSMC's production in Taiwan has long been seen as a strategic advantage, protecting it from potential attacks by China. However, the US has been pressuring Taiwan to shift more production to US soil, with the US Secretary of Commerce proposing a 50-50 split in chip production, which was rejected by Taipei, the Yahoo article said.

By accelerating its production timeline for 2-nanometer chips in the US, TSMC aims to capitalize on the AI boom and secure its market leadership position. This strategic move is also expected to enhance TSMC's resilience against geopolitical risks and trade tensions.