TSMC Plans Record Spending, $100 Billion U.S. Investment as AI Fuels Earnings Beat — Update

By Sherry Qin and Yang Jie

Taiwan Semiconductor Manufacturing Co. just delivered another earnings beat.

It has also pledged to invest an additional $100 billion in the U.S. and plans to spend a record amount cementing its position atop the global semiconductor supply chain, sending one of the strongest signals yet that the artificial-intelligence boom is alive and kicking.

The chip giant raised its global capital expenditure budget for this year to a historic $60 billion to $64 billion, a roughly 7% to 14% increase pointing to continued demand for the advanced chips that power AI.

TSMC's extra $100 billion commitment brings its total planned investment in the U.S. to $265 billion, Chairman C.C. Wei said, "adding to the largest foreign direct investment in U.S. history."

The ramped-up spending caters to robust multi-year demand from top U.S. customers, and could fund the addition of four more advanced facilities to TSMC's existing Arizona site, Wei said on an earnings call Thursday.

The move comes months after Taiwan and the U.S. reached a trade and investment agreement that aligns with the Trump administration's bid to revive manufacturing capacity.

In a statement, U.S. Commerce Secretary Howard Lutnick said TSMC's announcement "will create tens of thousands of American jobs and bring advanced semiconductor manufacturing back to America."

Industry experts say that TSMC's financial commitments in the U.S. could serve as a political olive branch, but serve a business purpose too. By deepening its footprint in the world's largest economy, TSMC can secure American clients while keeping its most advanced manufacturing technology at home.

Wei said the U.S. expansion is a carefully calibrated move that addresses real-world market needs and requires years of planning.

Chip factories cost tens of billions of dollars to build and take years to become operational, requiring semiconductor firms to forecast demand years in advance before they start construction.

As AI keeps feeding global appetite for the chips TSMC makes, Wei said the company is doing whatever it takes to meet demand.

"We are using multiple levers to do everything we can, wherever we can, however we can, to maximize support to all our customers," he said.

Despite market concerns that rampant AI-related spending could be nearing its limit, projections from industry giants like TSMC suggest otherwise.

After posting second-quarter earnings that blew past market expectations, the Taiwanese firm raised its full-year revenue growth to slightly above 40% in dollar terms, up from its earlier estimate of above 30%.

Earlier this week, semiconductor-equipment giant ASML raised its annual sales outlook, pointing to extremely strong AI-driven orders.

TSMC's earnings strength during a traditionally weaker quarter adds to the case to stay bullish on its prospects this year.

Demand for AI infrastructure and consumer-electronics stockpiling drove a 77% on-year rise in net profit to 706.56 billion New Taiwan dollars, equivalent to US$21.98 billion, while quarterly revenue rose 36%.

Still, that might not be enough to please a market characterized by stretched valuations and ever-higher expectations. TSMC's U.S.-listed shares were trading 3% lower after the results.

If any of those doubts are troubling TSMC's leadership, it wasn't apparent in the company's guidance.

Besides doubling down on investment in the U.S., TSMC is building 13 leading-edge and advanced packaging plants in Taiwan over the next several years, and will continue to invest there too, Wei said.

Asked if he was concerned about competition from rivals like Samsung Electronics or Intel, Wei said TSMC's technology, manufacturing capabilities and customer trust is its "secret recipe" for success.

In the semiconductor industry, clients put a lot of thought into who they partner with, he said. It isn't like "buying milk from the 7-11."

Write to Sherry Qin at sherry.qin@wsj.com and Yang Jie at jie.yang@wsj.com

(END) Dow Jones Newswires

July 16, 2026 06:39 ET (10:39 GMT)