TSMC, the world’s biggest chipmaker, has reportedly just announced it plans to invest another $100 billion in the US (via AP News) to expand its chip production in the country. ‘Another’, that is, on top of the $100 billion the company committed to last year.
That previous $100 billion was in addition to the $65 billion that TSMC had already said it planned to put into the US. Last year’s $100 billion pledge was, according to President Trump, at his rather unsubtle behest: “All I did is say if you don’t build your plant here you’re gonna pay a big tax… 25, maybe 50, maybe 75, maybe 100%.” This, of course, was in the wake of the US doing the hokey cokey with various tariffs.
It’s unclear whether TSMC’s new $100 billion plans are the result of similar conversations, and if so to what extent.
According to the Associated Press, during today’s earnings conference, the CEO C. C. Wei expressed that the new investments are to “support the strong multiyear demand from our leading US customers.”
The company certainly doesn’t seem to be wrong about that “multiyear demand.” The roaring success of companies like TSMC and Nvidia is, of course, thanks to the AI boom, which has helped create a massive demand for memory, leading to a global supply crisis. And corroborating TMSC’s prediction that this will continue, industry researchers predict massive demand that outweighs supply even into 2030, after much more chip production.
Companies such as TSMC that actually produce wafers for chipmakers of course do very well from such demand, as the wafers they make go into both CPUs and AI accelerators (GPUs, essentially) in AI servers. This is why, as Reuters reports, the company’s just-reported second quarter profit can be so high—a forecast-beating record jump to $22 billion, apparently.
The fact that the company is going to move so much more of its production towards the US, however, was not a given. Currently China is rapidly expanding its memory production and will likely soon be hot on the heels of the West in terms of wafer production capabilities, so it’s all to play for. There’s also the possibility that TSMC is looking to keep the current US administration sweet given geopolitical uncertainties around China and Taiwan, where the company is based.
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