From Arizona to the "Silicon Prairie" in Texas: TSMC (TSM.US) may further expand its manufacturing footprint in the United States

According to information from Zhitong Finance APP, global semiconductor foundry leader TSMC (TSM.US) is evaluating potential investment in Texas to expand its chip manufacturing presence in the United States. According to sources cited by foreign media, this potential investment would be in addition to the $26.5 billion TSMC has already pledged for its Arizona operations, and the relevant plans have not yet been finalized.

Taiwanese media, quoting sources from the semiconductor equipment supply chain, report that TSMC is assessing the construction of its second large manufacturing campus in the US, with plans for up to six additional advanced wafer fabs. The potential locations are focused on Dallas and North Texas, and the investments could surpass those in Arizona.

Choosing Texas is no coincidence. Dallas and North Texas, often dubbed the “Silicon Prairie,” already boast mature clusters in semiconductor manufacturing, silicon wafer supply chains, optical communications, and the defense and military industry. Major firms such as Texas Instruments, Samsung, Coherent, and Tesla have established plants in the region.

Wells Fargo analyst Joe Quatrochi noted that the region already has multiple wafer fabs in operation, making it a logical location for TSMC’s second campus. In addition, Texas’s strengths in land, energy, and talent are attractive for high-energy-consumption advanced wafer fabs.

Strategically, expansion of 2-nanometer production is a key focus. TSMC’s 2nm process began contributing to revenue in the second quarter of 2026, with major customers including Apple, NVIDIA, AMD, and Qualcomm. As these major clients increase their order volumes by 10% to 20%, TSMC is accelerating capacity expansion. Monthly 2nm capacity may reach 120,000 wafers by the end of the year, higher than the market’s previous estimate of 90,000 to 100,000, bringing forward the capacity level initially targeted for 2027. Quatrochi stated that if this expansion is realized, it should be regarded as a potential incremental positive for semiconductor equipment companies.

Client demand and policy pressure are dual driving forces behind TSMC’s increased manufacturing in the US. In the first half of 2026, American customers accounted for as much as 75.64% of TSMC’s revenue. Meanwhile, the Trump administration continues to pressure chip makers to repatriate manufacturing capacity, threatening tariffs as high as 200% for companies that do not build plants in the US, further incentivizing TSMC to expand its footprint in America.

In terms of market impact, if TSMC launches a second campus in Texas, it will link together wafer manufacturing in Arizona and advanced ecosystems in Texas, establishing two major manufacturing bases in the US and benefiting the semiconductor equipment supply chain. However, detailed plans for the six fabs, investment amounts, and process nodes have yet to be officially confirmed. Supply chain industry members believe the site selection assessment is nearing completion, but TSMC’s board has yet to make a final decision.

In July, TSMC announced an additional $10 billion investment in Arizona, bringing its planned cumulative investment in the state to $26.5 billion. This expansion is expected to add four more semiconductor manufacturing and packaging facilities, raising the total number of TSMC facilities in the US to 12.

TSMC’s first US chip plant in Phoenix began volume production of 4nm chips at the end of 2024. Its second plant is expected to commence production of even more advanced 3nm chips in the second half of next year.