Taiwan Semiconductor Manufacturing Co. (TSMC) is set to significantly accelerate its multibillion-dollar investment in Arizona, driven by soaring demand for artificial intelligence chips and bolstered by a newly signed U.S.-Taiwan trade agreement. The world's leading contract chipmaker has confirmed plans to expand its "gigafab cluster" in the state, with capital expenditures projected to rise over 30% in the new year.

Speaking to CNBC, TSMC Chief Financial Officer Wendell Huang cited "strong conviction on the AI mega trend" as the core reason for ramping up investments both in Taiwan and the U.S. The expansion follows the company's recent purchase of additional land in Arizona, where it now holds approximately 2,000 acres for future development.

The announcement coincides with a U.S.-Taiwan trade deal signed Thursday, which caps U.S. tariffs on Taiwanese goods at 15% and includes commitments for $250 billion in direct Taiwanese investment in U.S. semiconductor and AI sectors. While Huang stated TSMC was "not part of the discussions," the agreement aligns with Washington's strategic goal to reshore critical chip manufacturing.

Progress at TSMC's first Arizona fab, now in mass production, has bolstered confidence. Huang reported that the facility is achieving yields and technology levels comparable to its leading plants in Taiwan, proving its "manufacturing excellence can be repeated in the U.S."

Despite this success, TSMC's most advanced technologies will continue to be developed and scaled in Taiwan, where R&D collaboration and cost structures remain favorable. Nevertheless, the U.S. timeline is accelerating: production at a second Arizona plant is now expected in the second half of 2027, with construction on a third facility advancing this year. The company has also begun permit applications for a fourth plant.

TSMC's original Arizona master plan envisioned six fabrication plants, two advanced packaging facilities, and an R&D center on 1,100 acres. The recent land acquisition provides additional space to accommodate this expanded roadmap and reserve flexibility for future growth.