Taiwan Semiconductor Chief Says US Expansion Not Driven By Political Pressure, But AI Boom, Warns of Supply Shortage

Contract chipmaker Taiwan Semiconductor Manufacturing Co TSM Chairman and CEO C.C. Wei emphasized that its U.S. chip investment boost came from customer demand for its chips, which are critical for powering everything from the latest artificial intelligence systems to smartphones.

The Taiwanese contract chip maker’s latest $100 billion investment plan (on top of its $65 billion already committed) aims to meet surging demand from U.S. customers, the Wall Street Journal cited Wei at a press conference alongside Taiwan President Lai Ching-te at the presidential office on Thursday.

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Wei said that Taiwan Semiconductor’s production lines were fully booked for 2025 and the next two years.

Wei said the chipmaker will build three new chip plants, two chip-packaging facilities, and a research and development center, which will be driven by demand rather than political pressure, according to the WSJ report.

However, he added that despite the $100 billion investment, its production capacity will be insufficient to meet the demand.

ING’s Jan Frederik Slijkerman told the WSJ that Taiwan Semiconductors U.S. investment without subsidies marked a policy win for the Trump administration.

Since his presidential campaign, President Donald Trump has criticized Taiwan’s near-dominance in advanced chip manufacturing and threatened tariffs on chip imports.

Analysts highlighted Taiwan Semiconductor’s previous acknowledgment of the higher construction and manufacturing expenses in the U.S., prompting them to retain research, design, and manufacturing in Taiwan.

Despite the investment, the Taiwan government maintained that the country would continue to be the key advanced semiconductor headquarters and retain the most advanced tech in the home country.

Morningstar’s Phelix Lee told the WSJ that Taiwan Semiconductor would likely have to shift the burden of higher costs and expenses to the customers to maintain profitability, given the likely lower levels of U.S. government support.

Wei told WSJ that the chipmaker remains committed to its target of building 11 production lines in Taiwan in 2025.

IDC expects the Taiwanese contract chipmaker to command a 67% share of the global foundry market in 2025.

Price Action: TSM stock traded lower by 1.81% at $172.70 at the last check on Friday.

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