Strong demand for AI + trade agreements drive Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) to increase investment in the US.

Driven by another impressive financial report and the promotion of the US-Taiwan trade agreement, the chip manufacturing giant Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) is preparing to accelerate its expansion plan in the state of Arizona, USA. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR had previously committed to investing $16.5 billion in the United States to support the US government's plan to rebuild the domestic semiconductor manufacturing industry. However, executives of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR recently hinted that as the company expands its capacity to meet the demand for artificial intelligence (AI) chips, the investment in the United States will further increase. Chief Financial Officer Emily Tan of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR stated in an interview that the company will continue to increase its investment in Arizona. Emily Tan said, "We are confident in the grand trend of AI, which is why we are increasing capital expenditures to expand capacity in Taiwan and the United States." "Not only for expansion, but also to try to accelerate as much as possible to meet demand or narrow the supply-demand gap." Before Emily Tan's statement, CEO Wei Zhejia of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR announced in a financial report conference call that the company recently purchased additional land in Arizona and plans to build a "giant wafer fab cluster" in the state. According to Emily Tan, the original plan for Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR for the initial purchase of 1,100 acres of land in Arizona included six wafer fabs, two advanced packaging facilities, and a research center. However, it was found that this land was not enough to support the company's expansion plans, prompting the company to purchase an additional 900 acres of land. Emily Tan stated that some of the facilities in the original plan will now be built on this second piece of land, with the remaining land "reserved for flexibility in the future." In the financial report released on Thursday, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR stated that it expects capital expenditures in 2026 to significantly increase from $40.9 billion in 2025 to $52-56 billion, better than the market's expectation of $48-50 billion. The company also stated that capital expenditures over the next three years will increase significantly. This guidance and statement bring new optimism for the continued growth of global AI spending in 2026, indicating that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, as the world's largest wafer foundry company, is expected to continue to benefit from the strong demand brought by the AI wave. Meanwhile, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's plan to accelerate its expansion in Arizona coincides with the signing of the US-Taiwan trade agreement. According to the agreement, tariffs on goods from Taiwan to the United States will be reduced to 15%, and Taiwan chip companies will invest at least $250 billion in the United States to expand chip production in the US. However, Emily Tan denied that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's investment plan in the United States is directly related to the US-Taiwan trade negotiations. He stated that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR did not participate in the discussions of the US-Taiwan trade agreement, but due to customer demand, the company is continuing to invest and accelerate its investment in Arizona. He added that the first wafer fab in Arizona has already started operation and is progressing very smoothly. It is reported that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is preparing multiple stages of 2nm wafer fabs in Taiwan. Overseas, construction of the P2 factory in Arizona has been completed, and production facilities are expected to be relocated by 2026. The company is also advancing the construction of a factory in Germany and a second factory in Japan. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR stated that its first wafer fab in the United States has begun mass production, and the yield and process level of chip production are now comparable to the company's advanced fab in Taiwan. However, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR still emphasized that its most advanced technology will continue to be developed and expanded in Taiwan, benefiting from the necessary collaboration between its research and development team and manufacturing operations. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR stated that it has advanced the production schedule of its second Arizona wafer fab to the second half of 2027, and the construction of the third wafer fab will also accelerate this year. The company also announced in its recent performance conference call that it has begun to apply for permits for the construction of the fourth wafer fab.