TSMC Ramps Up Expansion with Record $42 Billion Investment Amid Industry Scrutiny

As of last week, Taiwan Semiconductor Manufacturing Company (TSMC) maintained its position with no significant change. Over the past week, TSMC saw an increase of 10.03%, yet its year-to-date performance shows a decline of 1.31%, reflecting a current market cap of approximately $10.073 billion.

Recent developments regarding TSMC indicate ambitious expansion plans. The company aims to establish nine advanced manufacturing facilities in 2025, including eight wafer fabs and a chip-wafer-substrate (CoWoS) packaging line. This expansion is one of its most significant undertakings in a single year.

TSMC’s annual average of three new factory builds from 2017 to 2020 has surged to threefold this year. Substantial investment is expected to accompany this expansion, with capital expenditure in 2025 projected at between $38 billion to $42 billion, surpassing 2024’s $29.2 billion and setting a record higher than 2022’s $35.2 billion.

AMD has confirmed its commitment to utilize TSMC’s groundbreaking 2nm process technology. As one of TSMC’s first clients for this advanced technology, AMD plans to launch its next-generation Zen 6 EPYC processors dubbed "Venice" in 2026. AMD executives have reiterated their focus on optimizing CPU energy efficiency and performance within this context.

The TSMC is reportedly contemplating a 10% increase in its wafer fabrication prices, prompting heightened scrutiny within the industry. Despite the price hike, Nvidia CEO Jensen Huang has emphasized that TSMC’s advanced processing prices are justified, reflecting the intrinsic value derived from such state-of-the-art fabrication capabilities.

Huang acknowledged the complexity and substantial cost involved in constructing wafer fabs and processes below 2nm but noted the consistent and fair pricing model applied across all clients. This sentiment was echoed during a recent meeting with TSMC Chairman Mark Liu and his team, further cementing TSMC’s pivotal role in the global semiconductor landscape.

TSMC continues to strengthen its foundational position within the semiconductor market, driven by growing demands in AI, advanced processing, and global supply chain security. A notable increase in production capacity is anticipated this year, particularly with their 3nm technology.

Looking ahead, TSMC’s strategic move to concentrate cutting-edge process capabilities in Taiwan, while diversifying mature process and packaging plants globally, forms part of a broader risk mitigation strategy. This balance ensures TSMC retains its technological advantage, particularly with 85% of its 3nm and below capacity situated domestically.