TSMC Is Accelerating Its Arizona Factory Build-Out. Its CFO Says AI Is A ‘Multi-Year Megatrend’

Taiwan Semiconductor Manufacturing Co. (TSMC) is accelerating the expansion of its massive Arizona chip manufacturing campus as it moves to capitalize on what the company describes as a long-term artificial intelligence boom, according to comments from Chief Financial Officer Wendell Huang.

Speaking with CNBC's Emily Tan following the company's latest earnings report, Huang said TSMC sees no signs of slowing demand from customers investing heavily in AI infrastructure, prompting the world's largest contract chipmaker to ramp up production capacity in the United States.

"We're seeing this strong structural, multi-year demand, and we do not plan to leave any food on the table for anybody else," Huang told CNBC. "As long as the megatrend is right, then we're able to continue to deliver the profitable growth to our shareholders."

The accelerated expansion comes after TSMC announced an additional $100 billion investment in Arizona, boosting its total planned spending in the state to $265 billion. The commitment represents one of the largest foreign direct investments in U.S. manufacturing history and reflects the semiconductor industry's race to meet soaring AI-related demand.

The growing investment also prompted TSMC to raise its full-year capital expenditure forecast to between $60 billion and $64 billion. According to Huang, the decision is being driven by strong customer demand in the United States and continued government support for domestic semiconductor production.

To meet that demand, TSMC is rapidly optimizing production at its most advanced manufacturing facilities. Huang said the company is converting more of its existing 5-nanometer production capacity to the more advanced 3-nanometer process, allowing it to manufacture increasingly powerful and energy-efficient chips needed for AI applications.

Nanometer measurements refer to the size of individual transistors on semiconductor chips. Smaller transistors allow manufacturers to fit more components onto a chip, generally improving both performance and power efficiency, making advanced process technologies especially valuable for AI computing.

TSMC has already begun manufacturing chips at its first Arizona facility using its 4-nanometer process technology. "It's going to be bigger and bigger in the next few quarters," Huang said, adding that the company's cutting-edge 2-nanometer technology is emerging as its newest growth driver after generating its first revenue during the second quarter and is expected to contribute further beginning in the third quarter.

The Arizona expansion, however, comes with significantly higher costs than producing chips in Taiwan. According to Huang, building semiconductor fabrication plants in the United States costs roughly four to five times as much as constructing comparable facilities in Taiwan. Even so, he argued that the investment will strengthen the broader U.S. semiconductor ecosystem over the long term.

The latest $100 billion commitment will support both front-end wafer fabrication facilities and advanced packaging plants, an increasingly critical part of semiconductor manufacturing as AI chips become more complex. "It will be both the front-end wafer fabs and back-end advanced packaging fabs," Huang said.

Despite reporting strong financial results, TSMC shares experienced volatility following the earnings release. The stock gained 1.23% on Thursday before falling 7.29% on Friday. Even after the decline, shares remain approximately 48% higher year to date, reflecting continued investor optimism surrounding AI-driven semiconductor demand.

Asked about the market reaction, Huang emphasized that management remains focused on business execution rather than short-term stock price movements. "What we can do is really to focus on fundamentals of our business," he said.

Huang also noted that although component costs across the semiconductor industry continue to rise, TSMC expects only limited impact because it concentrates on premium, leading-edge manufacturing technologies.

Beyond expanding production, the company continues to navigate geopolitical and regulatory challenges. Huang said TSMC remains fully compliant with international export control regulations while continuing to serve customers in China, which currently account for roughly 8% of the company's total revenue.