Taiwan Semiconductor Manufacturing Co (TSMC) is set to significantly expand its US operations by investing an additional $100bn, bringing its total commitment in the country to $165bn. The contract chipmaker’s CEO CC Wei made the announcement during a meeting with US President Trump at the White House.
“This will create hundreds of billions of dollars in economic activity and boost America’s dominance in artificial intelligence and beyond,” said President Trump. “Semiconductors are the backbone of the 21st century economy — and, really, without the semiconductors, there is no economy — powering everything from AI to automobiles to advanced manufacturing. And we must be able to build the chips and semiconductors that we need right here, in American factories, with American skill and American labour.”
TSMC’s planned expansion in US
The expansion will include the construction of three additional fabrication plants, two advanced packaging facilities, and a major research and development (R&D) centre. The move is said to be the largest foreign direct investment in US history.
The investment builds on TSMC’s existing operations in Phoenix, Arizona, which have been operational since late 2024. The facility currently employs more than 3,000 people.
TSMC’s planned expansion is expected to create 40,000 construction jobs over a four-year period and add numerous high-tech jobs in advanced chip manufacturing and R&D. Additionally, the investment is projected to generate more than $200bn in indirect economic output throughout Arizona and the US within the next decade.
TSMC’s US footprint also includes a fab in Camas, Washington, and design service centres in Austin, Texas, and San Jose, California. The company’s chips are used across the tech sector including smartphones, car consoles and servers that power AI.
“AI is reshaping our daily lives and semiconductor technology is the foundation for new capabilities and applications,” said TSMC chairman and CEO CC Wei. “With the success of our first fab in Arizona, along with needed government support and strong customer partnerships, we intend to expand our US semiconductor manufacturing investment by an additional $100bn, bringing our total planned investment to $165bn.”
In contrast to TSMC’s expansion, Microchip Technology, another player in the semiconductor industry, unveiled plans that it will cut around 2,000 jobs, or about 9% of its workforce. The layoffs are in response to the decreased demand from the automotive industry and are part of a broader restructuring effort. It will primarily affect the company’s fabs in Oregon and Colorado and is expected to be completed by the end of the June quarter, reported Reuters.
Microchip Technology is also proceeding with the closure of its Arizona factory ahead of schedule, which is anticipated to help manage demand fluctuations and inventory. Layoffs will also take place at the company’s backend manufacturing facility in the Philippines. The company estimates that it will incur costs between $30m and $40m due to the layoffs, with the expected outcome of reducing annual operating expenses by approximately $90m to $100m. Additionally, Microchip has plans to enter into a partnership with a Chinese firm to sell its integrated circuit die. The Chinese partner will be responsible for testing, assembling, and selling the products under a Chinese brand.
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