Taiwan Semiconductor Plans Major Global Expansion, Sets Record $38 Billion Investment Target

Taiwan Semiconductor Manufacturing Co TSM is gearing up for an ambitious global expansion, setting its sights on significantly increasing its production capacity.

The company plans to initiate construction on several new semiconductor fabrication plants worldwide by 2025, with more than ten facilities either newly built or under construction, Economic Daily News reports.

The contract chipmaker’s substantial capital investment will likely climb to unparalleled levels in 2025, with legal forecasts suggesting expenditures could range from $34 billion to $38 billion, pushing the company’s capital outlay to record highs.

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Industry insiders told Economic Daily News this surge in capital spending is a direct response to the growing demand for advanced semiconductor manufacturing processes, including the ramp-up of 2-nanometer technology.

Taiwan Semiconductor’s ongoing expansion involves multiple projects within Taiwan, including significant developments in Hsinchu and Kaohsiung.

According to the report, these locations will likely serve as core production bases for advanced 2-nanometer chips. Four fabrication plants, focusing on cutting-edge wafer manufacturing, are planned across these two regions.

Additionally, advanced packaging facilities are under development, incorporating the latest CoWoS (Chip-on-Wafer-on-Substrate) and SoIC (System-on-Integrated-Chips) technologies.

On the international front, Taiwan Semiconductor is moving forward with its plans for new plants in key overseas markets.

The company has confirmed that construction of its second factory in Japan’s Kumamoto region will commence in early 2025, targeting mass production by 2027.

In the United States, Taiwan Semiconductor is advancing with the buildout of a second wafer fab in Arizona, while a specialized process facility in Dresden, Germany, is also making headway.

Industry data told Economic Daily News that Taiwan Semiconductor’s aggressive growth trajectory will lead to an average of five new factories annually between 2022 and 2023. In 2024, this pace is expected to accelerate, with the company planning to build seven new facilities, including three advanced wafer fabs and two state-of-the-art packaging plants, alongside two overseas factories.

By 2025, Taiwan Semiconductor aims to exceed ten simultaneous projects globally—a first for the semiconductor sector and a significant boost to the company’s output capacity.

Taiwan Semiconductor will receive up to $6.6 billion in U.S. funding and $5 billion in proposed loans to develop advanced semiconductor plants in Arizona, strengthening local chip production.

The contract chipmaker’s Arizona facilities will likely begin operations in early 2025, producing chips for future technologies like 5G/6G networks and AI applications.

The chip manufacturer has accelerated its use of extreme ultraviolet (EUV) lithography systems, a crucial tool in semiconductor production, despite their high costs. Each EUV system exceeds $100 million, ranking among the priciest equipment in the industry.

Analysts estimate that Taiwan Semiconductor has expanded its EUV capacity significantly, growing its global share of EUV installations from 50% in 2020 to 56% in 2023.

Taiwan Semiconductor stock surged over 83% year-to-date.

Price Action: TSM stock traded lower by 1.11% to $183.95 premarket at the last check on Monday.

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