TAIPEI (TVBS News) — Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) is pouring unprecedented resources into American manufacturing as part of a US$250 billion (around NT$7.81 trillion) Taiwan investment commitment to the United States, a move the company's leadership says is essential for growth rather than a hollowing out of Taiwan's industrial base.
The world's largest contract chipmaker aims to build nine factories in the United States, expanding its American footprint to meet surging demand for artificial intelligence chips. TSMC's total U.S. investment stood at US$165 billion (around NT$5.15 trillion) as of last year, with plans to increase further.
The expansion comes as TSMC's market capitalization swelled to US$2 trillion for the first time last week, making it the world's sixth-largest company by market value, just behind Amazon.com Inc. The company's American depositary receipts (ADR) surged 4.25% on Tuesday (Feb. 24) to US$385.75 (around NT$12,047) on the New York Stock Exchange.
Resource Constraints Drive Overseas Push
Company executives say Taiwan simply cannot absorb TSMC's massive capital requirements. The chipmaker's annual capital expenditure is projected between US$52 billion (around NT$1.62 trillion) and US$56 billion (around NT$1.75 trillion) this year, the largest investment among global semiconductor companies.
Taiwan faces insufficient electricity, land constraints and talent limitations that make it difficult to support the semiconductor industry's enormous investment demands, according to a Business Today (今周刊) analysis. The island's resources cannot sustain a company now ranked among the world's six largest by market value.
The United States represents TSMC's most crucial expansion location because 75% of the company's revenue comes from North American clients. Japan and Europe currently account for only 4% to 5% of revenue.
Critics who warn that overseas expansion will hollow out Taiwan's economy echo concerns raised in the 1990s when Taiwanese businesses invested heavily in mainland China. Companies that expanded internationally during that period grew stronger and became trillion-NT-dollar enterprises, according to the Business Today analysis.
Decent Holdings (德鑫控股), a group comprising 18 TSMC suppliers, visited the United States last August. Chairman Chueh Sheng-che (闕聖哲) said suppliers worldwide recognized that TSMC's trend of investing in America was firmly established.
Foreign Investors Bet Big On Taiwan Chips
Global funds bought a net US$2.77 billion (around NT$86.51 billion) of Taiwan equities on Feb. 24, the largest one-day buying spree since December 2005, according to data compiled by Bloomberg. The purchase marked a sixth consecutive day of foreign fund buying.
Taiwan is on track for approximately US$7 billion (around NT$218.61 billion) in foreign inflows this month, contrasting sharply with similar outflows from memory-chip-focused South Korea over the same period.
"Taiwan is the home of the global AI supply chain," Vey-Sern Ling told Bloomberg, managing director at Union Bancaire Privee. Ling expects Taiwanese companies and stock market will continue to benefit "as long as investors believe that AI is disruptive and hence indispensable to our future."
TSMC's U.S. subsidiary is not currently profitable, primarily because operations remain in the early stages of the learning curve, according to the company. Management expects performance to improve as employee training progresses and supply chain partnerships develop.
The company has raised prices at its U.S. factory, and customers are willing to pay the premium, allowing high costs to be passed on. AI chip producers such as Nvidia (輝達), AMD (超微), Broadcom (博通) and Google (谷歌) have gross margins high enough to absorb wafer price increases.
TSMC's fourth-quarter 2025 gross margin increased 330 basis points year-over-year to 62.3%. Management projects the first-quarter 2026 gross margin between 63% and 65%.
Cultural Challenges Persist
TSMC faces significant challenges adapting its work culture to American operations. A former manager described an incident in which an American employee left equipment in an elevator at 5 p.m., rather than completing the task, requiring Taiwanese employees who stayed later to retrieve it.
More than half of the first batch of American employees sent to Taiwan for training have resigned, leaving those remaining more in line with the company culture. The company acknowledges it must shape an inclusive U.S. factory culture that accommodates diverse perspectives.
TSMC maintains more than 10,000 research and development engineers in Taiwan. Overseas plants replicate successful models developed at the Taiwan headquarters, typically with a two-year delay. Chief Financial Officer Wendell Huang (黃仁昭) said in an interview that even with accelerated transfers, the gap would still be at least one year.
The risk of technology theft in the United States is lower than in China because the U.S. places greater emphasis on intellectual property rights and possesses a comprehensive judicial system, according to the Business Today analysis. ◼