Abstract:
TSMC is reportedly evaluating the possibility of expanding its semiconductor manufacturing operations in Texas, USA. If the plan is finally implemented, it will become TSMC's second large-scale advanced process manufacturing base in the United States after Arizona, and the related investment may be in addition to the previously committed $26.5 billion Arizona plan.
This news first came from the Taiwanese media "Economic Daily". The report quoted sources from the semiconductor equipment industry chain as saying that TSMC is considering building a new manufacturing park in Texas, which may have a scale of up to six advanced process wafer fabs. Dallas and its surrounding areas are considered to be one of the potential locations. If these fabs adopt more advanced process technology than currently planned in Arizona, the investment scale of the entire project may even exceed the $26.5 billion that TSMC has committed to Arizona.
Reuters later obtained similar information from two people familiar with the matter, confirming that TSMC is evaluating potential investments in Texas. However, sources emphasized that the plan has not yet been finalized and TSMC’s board of directors has not yet given final approval. Therefore, the Texas project cannot yet be considered a formalized construction plan.
TSMC has not yet made official comments on this.
TSMC announced an additional investment of US$10 billion in July this year, raising its total planned investment in Arizona to US$26.5 billion. TSMC Chairman and CEO Wei Zhejia said at the time that with the new investment, the company may eventually build 12 wafer manufacturing and advanced packaging facilities in Arizona and set up an R&D center.
According to the currently announced plan, TSMC's Arizona project will include multiple advanced process wafer fabs and advanced packaging facilities in the future. The new wafer fabs will use 2-nanometer and more advanced processes to meet the needs of U.S. customers in the next few years. TSMC did not give an exact completion time for the entire US$26.5 billion investment plan, but said that the specific construction progress will be adjusted based on market conditions and customer needs.
If the Texas project is ultimately approved, its positioning may differ from that in Arizona. Industry sources believe that the new park may be directly oriented to more advanced process nodes and constructed in response to the increasing demand from U.S. customers for locally manufactured chips. Large U.S. technology companies such as Nvidia, Intel, AMD and Apple are pushing for more localized supply chains, which may become an important factor in TSMC's expansion of U.S. manufacturing capabilities.
At the same time, the U.S. government has continued to promote the return of advanced semiconductor manufacturing to the United States in recent years. The Trump administration continues to emphasize the importance of domestic chip production in the United States and has repeatedly discussed using tariffs and other policy means to promote chip companies to increase the proportion of American manufacturing. There have even been policy threats to impose high tariffs on imported chips not produced in the United States, which has further increased the motivation of large chip manufacturers to expand production capacity in the United States.
The reason why Texas is a potential location is because of its own industrial base. The Dallas-North Texas region has long had a relatively complete semiconductor and high-tech industrial ecosystem and is known locally as the "Silicon Prairie." Texas Instruments, Samsung and other semiconductor and electronics companies are already here, and the area also has silicon wafer, optical communications, defense and advanced manufacturing industries. If TSMC builds a large-scale wafer fab cluster here, it can further utilize the local supply chain and talent resources that have been formed.
TSMC currently has multiple business locations in the United States. In addition to the Arizona advanced wafer fab under construction and expansion, the company also operates a wafer fab in Camas, Washington, and has design service centers in Austin, Texas, and San Jose, California. Therefore, if the Texas wafer fab project is finally implemented, TSMC's manufacturing, R&D and design business in the United States will further form a cross-regional layout.
However, the challenges that need to be faced in building advanced wafer fabs are also very obvious. Advanced process production not only requires huge capital investment, but also requires stable power, ultrapure water, highly specialized engineering personnel, and a complete equipment and material supply chain. As TSMC currently advances large-scale manufacturing projects in Arizona, it needs to continue to solve issues such as labor, infrastructure, and water supply.
Especially in building advanced process wafer fabs in the United States, the cost is usually significantly higher than in Taiwan. TSMC has repeatedly emphasized that manufacturing costs in the United States are high, so it needs to balance economics through advanced technology, customer support, government policies and other factors.
If Texas eventually builds up to six advanced wafer fabs, its scale will be very impressive. According to current industry reports, since these fabs may use more advanced processes than Arizona in the future, the potential investment in the entire project may even exceed US$26.5 billion. However, this figure is still industry speculation and is not the investment amount that TSMC has announced.
There is currently no evidence that TSMC has asked equipment suppliers to prepare equipment in advance for the Texas project. Relevant supply chain companies have not yet received formal procurement or production preparation notices, which further indicates that the project is still in the evaluation stage.
From the perspective of TSMC’s overall strategy, U.S. expansion is closely related to changes in the global semiconductor industry pattern. Artificial intelligence drives the demand for advanced process chips to continue to grow, and the United States is a major market for important customers such as Nvidia, AMD, and Apple. At the same time, geopolitical and supply chain security factors have also prompted chip manufacturers to disperse some advanced production capacity outside Taiwan.
If the Texas project is finally approved, TSMC's advanced process layout in the United States will further develop from the current single large-scale manufacturing base with Arizona as the core to multiple manufacturing centers. This will not only increase the domestic supply capacity of advanced chips in the United States, but may also further promote the formation of a new advanced semiconductor industry cluster in the Dallas-North Texas region.
However, there is still a long distance between the assessment and the actual construction of the factory. Site selection, land, power, water, government support, customer demand and ultimately return on investment all need to be further evaluated, and advanced fabs often take many years to go from planning to production. Therefore, even if TSMC finally decides to build a new base in Texas, it is unlikely that large-scale mass production capacity will be available in the short term.
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