Taiwan Semiconductor Plans New Factories To Boost Domestic Chip Production

Taiwan Semiconductor Manufacturing Co TSM is set to expand its domestic production capacity with new factories planned in Kaohsiung, Tainan, and Taichung. National Development Council Minister Paul Liu announced on Thursday, following concerns about Taiwan Semiconductor’s overseas expansion projects in countries like Japan, the United States, and Germany.

During a legislative session, Liu emphasized that Taiwan Semiconductor plans to build a new factory in Taiwan yearly over the next decade, Taiwan News reports.

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The Taiwanese government has pledged to ensure adequate water and electricity supplies to support these facilities, which are critical for semiconductor production.

Economics Minister Kuo Jyh-huei reinforced the commitment to domestic growth, stating that Taiwan Semiconductor’s expansion aligns with Taiwan’s strategic semiconductor objectives.

However, discussions around the company’s new plant in Arizona added a layer of complexity as conflicting statements emerged regarding an upcoming celebration for its completion.

While Kuo suggested such an event was imminent, Taiwan Semiconductor founder Morris Chang denied knowledge of it, sparking debate among legislators.

Liu, a Taiwan Semiconductor board member, clarified that he was unaware of any planned celebrations but confirmed he had been invited to a board meeting in the United States in February.

In November, the Biden administration sanctioned Taiwan Semiconductor, restricting its sale of advanced AI chips to China. Meanwhile, during his campaign, former President Donald Trump outlined plans to impose tariffs on Chinese exports, continuing his criticism of the country.

Under the CHIPS Act, Taiwan Semiconductor secured $6.6 billion in U.S. subsidies and proposed up to $5 billion in loans to support A16 chip production in Arizona.

Taiwan Semiconductor’s recent activities highlight its balancing act between domestic and international investments, ensuring global competitiveness while maintaining a strong presence in Taiwan.

The company is accelerating its expansion, aiming to establish over ten semiconductor facilities worldwide by 2025, boosting advanced production capacity.

Significant projects include 2nm fabs in Taiwan and a second plant in Japan’s Kumamoto region, which will break ground in 2025. In addition, Taiwan Semiconductor is advancing facilities in Arizona and Dresden and innovating in advanced packaging technologies such as CoWoS and SoIC.

The company anticipates record capital expenditures of $34 billion—$38 billion in 2025 to meet escalating demand for cutting-edge semiconductor manufacturing.

Price Action: At the last check on Thursday, TSM stock was lower by 1.77% at $185.02 premarket.

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