TSMC Pledges $100 Billion More for US Chips as Its Shares Slide

Taiwan Semiconductor Manufacturing Co. pledged another $100 billion to expand its Arizona chip operations Thursday, pushing its total US commitment to $265 billion. Hours after posting a record quarterly profit, its stock fell anyway.

The world’s largest contract chipmaker beat Wall Street’s estimates on nearly every line, raised its full year revenue forecast and told investors the artificial intelligence boom driving its business has years left to run. Investors flinched at the size of the new spending instead of cheering the profit, a reaction that says as much about where the AI trade stands right now as it does about TSMC itself.

From $12 Billion to $265 Billion in Six Years

TSMC’s Arizona buildout started small. The company’s original commitment in 2020 was $12 billion for a single fab, a figure the initial Arizona investment has grown far beyond since then. By March 2025, under pressure from tariff threats, that number had ballooned to $165 billion covering six fabs, two advanced packaging plants and a research center.

Thursday’s announcement resets the number again. The White House and the Commerce Department confirmed the new $100 billion will fund four additional facilities, taking TSMC’s Arizona campus to 12 leading edge semiconductor and packaging facilities in total.

CC Wei, TSMC’s chairman and chief executive, framed the new money as customer driven rather than political. He said the investment would support the strong multiyear demand from our leading US customers during Thursday’s earnings call.

A Record Quarter That Sent Shares Lower

The numbers behind the pledge were hard to argue with. TSMC’s second quarter filing reported net income of NT$706.56 billion, about $22 billion, up 77% from a year earlier. It was a record for the fifth straight quarter and the ninth consecutive quarter of double digit growth.

Revenue reached $40.2 billion, up 36% year over year and above the company’s own guidance. Analysts had penciled in NT$632.6 billion in net income; TSMC delivered well past that.

None of it stopped the selling. TSMC’s American depositary receipts (ADRs, US shares that represent stock in a foreign company) slid roughly 3% in pre-market trading, even with a stock that is up almost 40% this year. Investors zeroed in on the capital spending line instead of the profit line. TSMC raised its 2026 capital expenditure budget to a range of $60 billion to $64 billion, up from $52 billion to $56 billion, an increase of as much as 14%.

Wendell Huang, TSMC’s senior vice president and chief financial officer, said the third quarter would be carried by continued strong demand for our leading-edge process technologies, including the steep ramp-up of our 2-nanometer technology. TSMC guided third quarter revenue to between $44.6 billion and $45.8 billion.

Wei Bets the AI Boom Runs Through 2030

Wei was blunt about how long he expects the cycle to last.

I believe from this day on, all the way to probably 2029, 2030, the demand is very strong.

Wei made that prediction during Thursday’s earnings conference, describing AI related demand globally as extremely robust and saying the AI megatrend continues to drive the need for more and more computation.

High performance computing, the segment that includes AI accelerators, made up 66% of second quarter revenue, up from 61% in the first quarter. Chips built on 7 nanometer nodes or smaller, TSMC’s most advanced processes, accounted for 77% of wafer revenue, with 2 nanometer output alone already at 3%.

Nvidia, one of TSMC’s largest customers, is simultaneously pushing into new territory of its own; its N1X chip design has already cracked Intel and AMD’s grip on PC processors, the kind of customer ambition that keeps foundry capacity booked years out. Commerce Secretary Howard Lutnick tied the expansion directly to that demand, saying it would create tens of thousands of American jobs and bring advanced manufacturing back to US soil. The pledge lands months after Washington and Taipei struck a trade deal cutting US tariffs on Taiwanese goods in exchange for roughly $250 billion in fresh Taiwanese investment across America’s tech sector.

Is Taiwan’s Silicon Shield Cracking?

Taiwan’s dominance in advanced chipmaking is often described as a silicon shield, the idea that the island’s irreplaceable role in the global chip supply keeps outside powers invested in its security. Each time TSMC adds another $100 billion in Arizona, that shield becomes part of the political argument at home.

When TSMC first pushed its US pledge past $100 billion in March 2025, the reaction inside Taiwan split sharply along party lines. Fu Kun-chi, the legislative caucus whip for the opposition Kuomintang, warned the deal could leave Taiwan with nothing to safeguard if China attacks. Former president Ma Ying-jeou accused the ruling party of selling TSMC to the United States.

Taiwan’s semiconductor industry is not a small side business. It makes up 18% of the island’s gross domestic product and accounts for 60% of its exports, according to the Stimson Center, a Washington policy institute. Taiwan still produces roughly 60% of the world’s chips and 90% of the most advanced semiconductors made anywhere.

• Kuomintang opposition figures – Fu Kun-chi and Ma Ying-jeou argue the Arizona buildout weakens Taiwan’s leverage if Beijing moves against it.
• Taiwan’s government and economists – Vice Premier Cheng Li-chiun and Chung-Hua Institution for Economic Research president Lien Hsien-ming say less than 15% of TSMC’s advanced processes will sit in the US by 2029.
• Political scientist Lev Nachman – a National Taiwan University scholar, calls the hollowing out claims more about domestic politics than a genuine critique of TSMC’s strategy.

Taiwan’s president, Lai Ching-te, called the earlier expansion a historic moment for relations with Washington rather than a concession forced by pressure. Wei has echoed that line publicly, saying TSMC only builds outside Taiwan when customer demand requires it.

Four Fabs, One Target: Two Nanometers

The engineering story behind the money is straightforward. TSMC’s first Arizona fab is already running 4 nanometer production for customers that reportedly include Apple and Nvidia. The four new plants funded by Thursday’s pledge will chase the next generation, 2 nanometer and below, along with dedicated advanced packaging lines.

That packaging piece matters more than it sounds. Advanced packaging, the process of stacking and connecting chips rather than printing them, has become the tightest bottleneck in AI chip production, since accelerators need to be fused with high bandwidth memory before they ship. TSMC’s first three Arizona fabs alone are expected to create roughly 6,000 direct jobs plus tens of thousands more across construction and suppliers.

Even with four more plants on the way, Taiwan is not ceding its technological lead anytime soon. The most advanced chips TSMC makes today are produced only in Taiwan, and 2 nanometer output is not expected to begin in Arizona before 2028 at the earliest, which keeps US production roughly a generation behind the home island by design.

Rivals Feel the Same Whiplash

TSMC is not the only chip name getting punished for good news lately. South Korean memory maker SK Hynix shares sank a record 15% in Seoul just days after a strong Nasdaq debut, a sign that investors are quick to sell chipmakers even when the underlying business is firing.

Other corners of the same trade are still climbing. Marvell, Broadcom and Hewlett Packard Enterprise all touched fresh 52-week highs this month as the AI infrastructure trade broadens well beyond Nvidia and TSMC alone. The split suggests investors are getting pickier about which AI bets they will pay up for, rewarding hardware makers with cleaner margins while punishing anyone whose spending is about to spike.

TSMC sits at the center of that argument because of what it represents. It is the main chipmaker behind Nvidia’s processors and a linchpin of the broader AI supply chain, which is exactly why its capital spending guidance moves markets the way a single company’s budget rarely does.

Frequently Asked Questions

How Much Has TSMC Committed to the US Now?

TSMC’s total pledged US investment stands at $265 billion after Thursday’s $100 billion addition, up from $165 billion committed in March 2025 and just $12 billion when the Arizona project began in 2020. The money now covers 12 planned facilities in Arizona.

Why Did TSMC Stock Fall After Record Earnings?

TSMC’s American depositary receipts slid about 3% in pre-market trading despite a 77% jump in net profit, as investors focused on the raised capital expenditure budget of $60 billion to $64 billion, worried the spending could pressure margins even as revenue guidance rose.

What Chips Will the New Arizona Plants Make?

The four new fabs funded by the latest pledge will target 2-nanometer and below process technology plus advanced packaging, the same tier of chip TSMC’s first Arizona plant, currently running 4-nanometer production, has not yet reached.

Will Taiwan Keep Its Most Advanced Chip Production?

Yes, according to Taiwanese officials and economists. CIER president Lien Hsien-ming estimates less than 15% of TSMC’s advanced manufacturing will sit in the US by 2029, and 2-nanometer production is not expected in Arizona before 2028 at the earliest.

How Much Is TSMC Spending on Capital Expenditure in 2026?

TSMC raised its 2026 capital expenditure guidance to a range of $60 billion to $64 billion, up from an earlier forecast of $52 billion to $56 billion, an increase of as much as 14% tied directly to AI chip demand.