TSMC weighs multibillion-dollar Texas campus for AI chip production

October 1, 2026 at 03:24 PM2 min

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Taiwan Semiconductor Manufacturing Co. is weighing a new campus in Texas that would add tens of billions of dollars in investment to its U.S. expansion. The project would include multiple chipmaking plants, each costing at least $20 billion, according to people familiar with the plans. The potential investment is contingent on U.S. legislators extending an advanced-manufacturing tax credit set to expire at the end of this year.

Key Facts

TSMC has already committed to spending $265 billion at its Arizona site, where it is developing several fabrication plants.
Business from North America accounts for more than 75% of TSMC's wafer revenue so far this year.
The potential Texas investment is contingent on U.S. legislators extending an advanced-manufacturing tax credit that expires at the end of this year.
Senator Mike Crapo of Idaho and Senator Ron Wyden of Oregon have said they are committed to extending the tax credit.

Texas Expansion Plans

TSMC is looking into further overseas facilities to handle unrelenting demand for artificial intelligence hardware, according to people familiar with its plans. The envisioned Texas investment would involve multiple fabs, one of the people said. If TSMC ultimately decides to invest in Texas, the project would encompass multiple chipmaking plants, each costing at least $20 billion. The plans remain at an early stage, the people cautioned, asking not to be identified as the details aren't public.

Demand and Capacity

The AI boom has strained TSMC's existing capacity, and the company has had to roughly double its planned equipment purchases over the past year to keep up with demand, Deputy Co-Chief Operating Officer Cliff Hou said last month. AI silicon designers like Nvidia and Advanced Micro Devices bring in huge orders for some of TSMC's most advanced technology. Texas already has a significant semiconductor foundation, including an extensive chip production complex established by South Korea's Samsung Electronics. Elon Musk is also developing his Terafab project in Texas, which will supply chips for his business empire.

Tax Credit Contingency

The potential Texas investment is contingent on U.S. legislators extending an advanced-manufacturing tax credit set to expire at the end of this year. That tax credit was a cornerstone of former president Joe Biden's 2022 Chips Act and was increased to 35% and extended last year. While an extension has yet to find a viable path to passage this year, Senator Mike Crapo and Senator Ron Wyden have said they are committed to it.