TSMC poured another 100 billion USD into the US

On July 16, chip company TSMC announced it would invest an additional $100 billion in the state of Arizona (USA), right after announcing a record net profit in the second quarter thanks to demand for AI hardware. They are currently the world’s largest contract chip manufacturer and supply mainly to companies like Apple or Nvidia.

This investment will be used to build more chip factories in Arizona, bringing TSMC’s total investment capital into the US to 265 billion USD.

In March, US President Donald Trump and TSMC CEO CC Wei said the chip company planned to spend $100 billion to build 5 factories in the US in the next few years. Previously, in April 2024, the Taiwanese chip company said it would increase its investment in the US by 25 billion USD, to a total of 65 billion USD.

TSMC is currently benefiting greatly from the global AI race. Governments and technology giants are pouring money into building data centers to train and operate AI tools such as chatbots, image creation programs and AI agents capable of performing many tasks on their own.

This trend has greatly boosted the business activities of chip manufacturers like TSMC, causing chip supply to become scarce and prices to skyrocket. “Major AI trends continue to drive the need for increased computing capacity. We expect 2026 revenue to increase by more than 40% compared to the previous year, in USD terms,” ​​Mr. CC Wei said in the announcement of business results.

TSMC’s net profit in the second quarter increased 77% over the same period last year, to NT$706.6 billion (US$22 billion). This number far exceeds analysts’ forecasts and also exceeds the first quarter record (NT$572.4). Second quarter revenue increased 36% to NT$1,300 billion.

Wei said TSMC is expanding chip production capacity in Taiwan, Japan and the US “as fast as possible” to meet customer demand. “The gap between supply and demand is still very large, so we make every effort to narrow it,” Mr. Wei said.

According to Chief Financial Officer Wendell Huang, the Taiwanese chip company will increase its capital expenditure budget this year to 60-64 billion USD. “At TSMC, high capital spending always comes with more growth opportunities in the coming years,” Huang said, saying they do not expect to encounter “any hitches with capacity expansion plans.”

Before the Taiwanese chip company announced its business results, William Li – analyst at Counterpoint Research, commented that the sharp increase in revenue showed that “investment in AI infrastructure is still very vibrant, despite macroeconomic instability”.

“Demand for AI GPUs, AI ASICs and advanced chip packaging technology will continue to exceed expectations,” he asserted on AFP.