TSMC (NYSE:TSM) expects demand for artificial intelligence chips to remain strong for years as it accelerates investment in its manufacturing operations in Arizona, although the company acknowledges labour and infrastructure challenges could affect the pace of expansion.
Following stronger-than-expected second-quarter results, Chief Financial Officer Wendell Huang said the chipmaker remains confident in its long-term outlook and has increased its planned investment in Arizona to $265 billion.
Huang said TSMC remains encouraged by customer demand and intends to continue investing in production capacity with support from the U.S. government.
"We will continue to invest," he said, adding that the company was very grateful for U.S. government support.
"We continue to see customers' strong demand — multi-year structural demand."
As the world's leading manufacturer of advanced AI semiconductors and a key supplier to Nvidia, TSMC has become a closely watched indicator of global demand across the semiconductor industry.
The expansion also represents a significant boost for U.S. President Donald Trump's efforts to increase domestic semiconductor manufacturing.
Trump has repeatedly argued that Taiwan captured a significant share of America's chip industry and has said that by the time he leaves office, the United States will account for 50% of global semiconductor manufacturing capacity.
According to Huang, TSMC's first fabrication plant in Arizona is now operational and delivering manufacturing yields comparable with the company's flagship facility in Taiwan.
The second fabrication plant is preparing to install production equipment, while construction is progressing on a third facility. Preparatory work has also begun on a fourth fabrication plant and the site's first advanced chip packaging facility.
Once all current and planned projects are completed, TSMC's Arizona campus will include 12 fabrication and advanced packaging facilities along with a research and development centre. Huang did not provide a timetable for the latest investment plans.
He noted that expansion remains constrained by practical issues.
"However, there are physical constraints — the number of construction workers available, the infrastructures available," Huang said. "We'll work closely with the government to solve these issues."
While expanding internationally, TSMC continues to invest heavily in Taiwan, where it plans to build 13 advanced fabrication and packaging facilities over the coming years.
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