Rumor: Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) is planning a new campus in Texas: multiple wafer fabs, with total investment potentially reaching tens of billions of dollars.

Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) is studying a new campus in Texas that would add tens of billions of dollars in new investment to its multiyear US expansion. The preferred chipmaker for NVIDIA Corporation and Apple Inc. is scouting additional overseas sites to keep up with sustained demand for artificial intelligence hardware, according to people familiar with the matter. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has already committed $265 billion to a sprawling Arizona base where multiple fabs are under construction, and the envisioned Texas investment would likewise involve multiple fabs, one of the people said. North America accounted for more than 75% of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's wafer revenue so far this year, with AI chip designers such as NVIDIA Corporation and AMD driving huge orders for some of its most advanced technology. The AI boom has stretched Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's existing capacity, and Deputy Co-COO Cliff Hou said last month that its equipment purchasing plans had roughly doubled over the past year to keep pace with demand. If Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR ultimately decides to invest in Texas, the project would include multiple chipmaking plants costing at least $20 billion each, one of the people said. The plans are still at an early stage, the people cautioned, asking not to be identified because the details aren't public. The potential Texas investment hinges on whether US lawmakers extend an advanced manufacturing tax credit set to expire at the end of this year, one of the people said. The credit was a cornerstone of former President Joe Biden's 2022 Chips Act and was increased to 35% and extended last year. While no viable legislative path to extend the credit this year has emerged, Republican Senator Mike Crapo of Idaho and Democratic Senator Ron Wyden of Oregon have both said they are committed to pushing it forward. Texas already has a sizable semiconductor base, including a massive chip production complex built by South Korea's Samsung Electronics. Elon Musk is also advancing his Terafab project in the state, which would supply chips for his sprawling business empire. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR executives including CEO C.C. Wei have consistently said the company's international expansion will serve customer demand and depends on cooperation and support from local governments. Beyond the Arizona base, Taiwan's most valuable company is building a plant in Kumamoto, Japan, with Sony Group, and pursuing an early-stage project in Saxony, Germany. Texas isn't the only potential location Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has recently examined, however. The company has also communicated with officials in Singapore, which is actively courting semiconductor investment, according to multiple people familiar with the matter. Singapore is already home to several chipmaking plants and serves as the Asia-Pacific Hub Group, Inc. Class A for some of the world's largest AI developers, including Meta. The city-state has seen AI-driven growth and wants to play an increasingly important role in the technology's value chain. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's recent communications with Singapore haven't been previously reported. "We don't comment on market rumors," Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR said in a text message. Singapore's Economic Development Board declined to comment. As Asia's most valuable company, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has historically built its plants in Taiwan and benefited from that concentration of production, partly because it makes management and hiring simpler and more efficient. Growing US national security concerns, the Covid-19 pandemic and the subsequent AI boom have gradually driven this broad global expansion. Any expansion of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's international operations is unlikely to change its long-standing policy of keeping the most advanced chipmaking technology at home. Taiwanese officials have repeatedly reaffirmed that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR will keep its most cutting-edge research and development in Taiwan, and company executives have said this is the most effective way to advance technology.