TSMC plans $100 billion investment in US manufacturing capacity
Taiwan's chip manufacturing giant, Taiwan Semiconductor Manufacturing Company (TSMC), plans to invest at least $100 billion to expand its U.S. manufacturing operations.
This investment is part of a broader push by Trump to encourage investment in US manufacturing. TSMC$TSM has decided to build three new advanced chip manufacturing plants, in addition to the existing plant in Arizona and two more that are planned. This expansion is expected to bring tens of thousands of new jobs.
The investment will also include the construction of two advanced chip packaging facilities, where smaller chips will be assembled into more powerful systems, and a research and development center. This will bring the number of TSMC plants in the US to a total of six, including additional facilities.
The deal means that TSMC will invest a total of approximately $165 billion in the US. Trump has described the move as crucial not only for economic security but also for the national security of the United States,…
I'm very curious if this push and implementation of factory construction will mean the end of another cycle where factory production capacity will match (or exceed) total demand. Either way, a capex this high may reduce FCF and margins, but theoretically through to fair valuation as some of the geopolitical risk falls away.